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Country Risk Service United Arab Emirates Updater Product Image

Country Risk Service United Arab Emirates Updater

  • Published: September 2014
  • Region: United Arab Emirates
  • 21 Pages
  • The Economist Intelligence Unit

The UAE's sovereign risk rating, which The Economist Intelligence Unit upgraded at the end of 2013, has remained at BBB in the current assessment, supported by strong economic trends in the federation and progress made in debt restructuring since the Dubai debt standstill in 2009. Fiscal surpluses and large sovereign wealth fund assets also support the rating. Nevertheless, the UAE's debt-financing needs continue to weigh on the sovereign risk rating.

The UAE dirham will be susceptible to fluctuations in the US dollar, to which it is pegged. However, with the dollar not expected to suffer major weakness, there is no risk of the dirham being de-pegged. The large current-account surplus supports the currency.

Banks' profits have picked up strongly in the last 18 months, with slower growth in provisioning for non-performing loans and faster loan growth. Never-theless, the outlook for banks remains challenging, owing to still high debt ex-posure to government-related entities and tighter domestic lending regulations initiated by the Central Bank of the UAE to improve credit management.

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 2014-18: Political stability

Central scenario for 2014-18: Election watch

Central scenario for 2014-18: International relations

Central scenario for 2014-18: Policy trends

Central scenario for 2014-18: Fiscal policy

Central scenario for 2014-18: Monetary policy

Central scenario for 2014-18: Economic growth

Central scenario for 2014-18: Inflation

Central scenario for 2014-18: Exchange rates

Central scenario for 2014-18: 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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