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Abu Dhabi boasts strongest credit rating, positive outlook for GCC economies: S&P

Abu Dhabi boasts strongest credit rating, positive outlook for GCC economies: S&P
1 May 2024 08:36

MUSTAFA ABDELAZIM (DUBAI)

Data released by Standard & Poor’s Global Ratings (S&P) shows that the Emirate of Abu Dhabi holds the strongest sovereign credit rating among the Gulf Cooperation Council (GCC) countries. With a long-term rating of AA and a stable outlook, Abu Dhabi has maintained this top position since January of 2015.

A recent roundtable discussion on credit trends in the GCC revealed that Abu Dhabi boasts the region’s highest credit rating.

The agency forecasts a positive outlook for the GCC economies in 2024. They expect the UAE’s GDP to grow at the fastest rate, 2.2 percentage points higher than the GCC average, at a rate of 4.4%. This growth is supported by strong performance in the non-oil sectors, particularly Abu Dhabi’s economy, which is expected to exceed 3.7% this year.

According to the agency’s forecasts, the economies of Saudi Arabia and Qatar will grow at a rate of 2.2% this year. Bahrain, Kuwait, and Oman are expected to see growth of 2.4%, 2%, and 1.4%, respectively.

The agency expects the banking systems in the UAE and Saudi Arabia to continue leading growth compared to the rest of the region. They note that most banking systems can manage external debt flows through liquidation of foreign assets, leading to stability across key indicators for banks and banking systems in the GCC during 2024. Credit growth and profitability are expected to remain strong.

In terms of the real estate sector, data indicates that over 85% of the companies operating in the Gulf Cooperation Council countries have a stable future outlook, reflecting the agency’s expectations for stable operational performance.

Regarding the telecommunications sector, the agency expects core telecommunications revenues in the local GCC markets to grow by 1% - 3% annually during the period 2024-2025 for its portfolio of Gulf telecommunications companies.

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