US rating agency Standard & Poors (S&P) has revised Ras al-Khaimahs outlook downwards to negative, citing inadequate information on the UAE emirates population numbers and economic health.
The A/A-1 rating remains in place, but the revised outlook means there is now a one-in-three possibility of a negative rating action over the next two years.
We view progress in the development of Ras al-Khaimahs institutions as slow, read a statement from the agency.
S&P says that the emirate has provided unreliable and out-of-date information on the growth of its population, national income and external accounts. It cites an example where government records suggest that the number of people living in Ras al-Khaimah had more than doubled between 2009 and 2010, a statistic the rating agency does not view as realistic.
The government is now reviewing the accuracy of its data.
Despite the weaknesses of government institutions in the emirate, Ras al-Khaimahs fiscal position is not facing serious risks due to ongoing indirect financial support from the UAE federal government, says the agency.
Major costs such as the construction of schools and hospitals are paid for at the federal level.
S&P only upgraded Ras al-Khaimahs outlook to stable towards the end of last year.