The slowdown in Dubai’s economy will cause growth to slow in Ras al-Khaimah (RAK) in 2010, according to ratings agency’s Standard & Poor’s (S&P).
S&P is forecasting that RAK’s economy will grow about 4 per cent in 2010, after contracting by 1.3 per cent in 2009 as a result of the slowdown in Dubai.
“Demand for RAK’s main industrial and mining products…and for the rapidly developing tourism and real estate sectors has been affected by the global economic downturn more generally, and the economic crisis in Dubai specifically,” according to a report by the agency.
The continued economic strength of Abu Dhabi and other regional economies will however help offset the impact of the Dubai crisis, according to the agency.
S&P rates RAK as A, which it says is primarily based on the expectation of support from Abu Dhabi in the event of financial stress.
“In our opinion, the financial capacity of the UAE and the larger emirates, in particular Abu Dhabi, is ample to cover RAK’s modest liabilities, with RAK’s total debt estimated at around 36% of the emirate’s economic output at year-end 2009,” says the agency.