The Nation’s economic basics are hugely boosted with the abundance of hydrocarbon reserves with lower extraction budget, exciting non-oil economy as well as great-progressed infrastructure.
As per the Moody’s Investor Service, the UAE’s Credit Profile displayed out the national fiscal robustness, backed amply via their higher-per capita income, as well as better political stability.
In its annual credit investigation of the Arab league’s second-major economy, the ratings agency stated that its stable outlook on the UAE’s economy echoes its roughly balanced credit pressures. Its “baseline forecast assumes that nominal gross domestic product of the country will recover to pre-pandemic levels over the next three years”, the ratings agency stated as on Wednesday.
The nation has received an Aa2 rating that depicts on-being the third-major- as announced and represents the national (UAEs) economic powers that is absolutely derived vitally from towering income levels, resource legacy and competitiveness.
Moody’s Credit Analysts Thaddeus Best, Rafay Ahmad and David Rogovic, stated that; “Its “moderately large size, abundant hydrocarbon reserves with low cost of extraction, vibrant non-oil economy and well-developed infrastructure”, are reflective of its economic strength. We have adjusted the UAE’s [economic strength] score from the initial outcome of ‘a2’ [to ‘aa3’] to reflect the country’s exceptionally high wealth levels and its very large natural hydrocarbon endowment.”
Moody’s analysts further stated that; “The country’s economy is also relatively large in nominal GDP terms – at $354 billion in 2020 – and ranks in the top quartile of the sovereigns we rate, pointing to above-average resilience to shocks.”
Moody’s declared the UAE ratings prior this month with a constant outlook on the back of the government’s rapid retort to counter the Covid-19 pandemic, which it held did not substantially affect its economy.
The UAE rolled out its mass Covid-19 immunization programme right from the previous year, with almost 50 million tests steered and in excess of 12 million vaccine doses directed since the pandemic commenced. With aggressive testing and a swift vaccination determination, the nation has accomplished to diminish Covid-19 cases in the second wave, as contrasting to parts of Europe, the Americas and India, where infection rates have mounted.
This score is revealed by Aaa-rated sovereigns like the Netherlands or Sweden and it is one notch above that of its few of the oil-exporting counterparts in the GCC, they stated out. At $63,590 in procuring power parity terms, the UAE’s 2019 GDP per capita levels stood as one of the highest among sovereigns rated by Moody’s.
The rapid drive of the COVID-19 vaccine in the UAE presents “advantage” to Moody’s economic forecast, as “it could support a more rapid recovery in domestic tourism and provide a boost to the hospitality and retail sectors”.
In a separate valuation, the ratings agency stated further that the Abu Dhabi’s credit profiler – also stood steadied at Aa2 with a stable viewpoint – is insightful of the emirate’s balance sheet forte and its vast hydrocarbons reserves. Its fiscal strength endured to be robust to shocks, it held.
“We expect Abu Dhabi’s fiscal strength will remain resilient to risks related to the pandemic,” the analysts said.
