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Country Risk Service United Arab Emirates Updater Product Image

Country Risk Service United Arab Emirates Updater

  • ID: 2101604
  • May 2015
  • Region: United Arab Emirates
  • 22 Pages
  • The Economist Intelligence Unit

The UAE's sovereign risk rating, which we upgraded at the end of 2013, remains at BBB, supported by progress made in debt restructuring since the Dubai debt standstill in 2009 and by large sovereign wealth fund assets. Nevertheless, debt-financing needs continue to weigh on the sovereign risk rating and lower oil prices in 2015-16 are negative for the UAE's fiscal balance, export revenue and economic growth.

The UAE dirham will be susceptible to fluctuations in the US dollar, to which it is pegged. The strengthening dollar raises the question of whether the peg will under-mine competitiveness, but there is little risk of the dirham being de-pegged. The oil price slump will erode the previously large current-account surplus in 2015-16.

Banks' profits picked up strongly in 2013-14, with slower growth in provisioning for non-performing loans and faster loan growth. Nevertheless, the outlook for banks is not without challenges, owing to still high debt exposure to government-related entities; tighter domestic lending regulations initiated by the Central Bank of the UAE; and the impact of lower oil prices on liquidity and economic activity.

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Country Risk Service United Arab Emirates Updater

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Central scenario for 2015-19: Political stability

Central scenario for 2015-19: Election watch

Central scenario for 2015-19: International relations

Central scenario for 2015-19: Policy trends

Central scenario for 2015-19: Fiscal policy

Central scenario for 2015-19: Monetary policy

Central scenario for 2015-19: Economic growth

Central scenario for 2015-19: Inflation

Central scenario for 2015-19: Exchange rates

Central scenario for 2015-19: 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

Note: Product cover images may vary from those shown
Note: Product cover images may vary from those shown

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