Country Risk Service United Arab Emirates Updater
The Economist Intelligence Unit, May 2013, Pages: 18
The outlook for the domestic political environment is broadly stable, although there is a possibility of a transfer of power in Abu Dhabi from the current ruler, Sheikh Khalifa bin Zayed al-Nahyan, to the crown prince, Sheikh Mohammed bin Zayed al-Nahyan, within the forecast period. External political risk remains high owing to tensions between Iran and the West. The openness of the economy makes it susceptible to external shocks such as the ongoing crisis in the euro zone. On the domestic front, the northern emirates present a risk, as the wealth gap between Emiratis there and those in Dubai and Abu Dhabi is widening. In general, though, the president of the UAE and the ruler of Abu Dhabi, Sheikh Khalifa, enjoys the support of the rulers of the other six emirates and faces no significant threat to his authority. The protests that swept the region in 2011 have increased calls for greater political representation and have led to a number of arrests of members of al-Islah, an Islamist organisation. Bank lending will remain under pressure in 2013 as the Central Bank of the UAE continues to tighten regulation to prevent a repeat of the debt crisis in Dubai in 2009. Growth is projected to average just under 5% a year in 2013-17.
Our forecast is unchanged. The UAE authorities have arrested members of what they say to be an al-Qaida cell. The UAE has arrested suspected jihadis before, but the claim that the cell is affiliated to al-Qaida is a new departure.
Our outlook has not changed. The Central Bank of the UAE is launching a pilot programme for a credit bureau, ahead of an official start-up in 2014. Banks hope the credit bureau will help them assess the risk of individual customers defaulting on loans.
Country Risk Service United Arab Emirates Updater
United Arab Emirates at a glance: 2013-17
OVERVIEW
Key changes from last month
Political outlook
Economic policy outlook
Economic forecast
Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Rating definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk
Central scenario for 2013-17: Political stability
Central scenario for 2013-17: Election watch
Central scenario for 2013-17: International relations
Central scenario for 2013-17: Policy trends
Central scenario for 2013-17: Fiscal policy
Central scenario for 2013-17: Monetary policy
Central scenario for 2013-17: Economic growth
Central scenario for 2013-17: Inflation
Central scenario for 2013-17: Exchange rates
Central scenario for 2013-17: External sector
Key risk indicators
Ratings summary
Quarterly indicators
International assumptions summary
Economic structure
Public finances
Exchange rates, interest rates and prices
Financial sector
Current account
International liquidity
Foreign payment and liquidity indicators
External trade
External financing requirement
External debt stock
External debt service
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