BREAKING NEWS - UAE credit quality sound
Moody's Investors Service yesterday said that the recently announced restructuring of Dubai World's liabilities is unlikely to threaten the credit quality
Moody's Investors Service yesterday said that the recently announced restructuring of Dubai World's liabilities is unlikely to threaten the credit quality of the government of Abu Dhabi and the federal government of the UAE. Both of these governments are rated Aa2 with a stable outlook.
"Overall macro-economic stability is protected by the country's strong net external creditor position that is bolstered by Abu Dhabi's accumulated oil wealth," Tristan Cooper, Head Analyst for Middle East Sovereigns at Moody's in Dubai, said in a statement.
Significantly, the rating agency notes that the Dubai World restructuring has effectively reduced the government's contingent liabilities by highlighting the limits of government support for indebted state-owned companies.
The main factor underpinning the UAE's high investment-grade sovereign rating is its robust external position.
Moreover, the fiscal position of the UAE, and Abu Dhabi in particular, remains healthy. The UAE's consolidated fiscal surplus has averaged at around 20 per cent of GDP over the past five years and is likely to post a small surplus in 2009 despite a sharp fall in oil export revenues.
