Ras Al Khaimah retains A/A-1 rating with stable outlook

Ras Al Khaimah has retained its A/A-1 sovereign credit rating from S&P Global with a stable outlook for 2026, with the agency citing prudent fiscal management, strong buffers and broad economic stability over the next two to three years.

S&P said the emirate’s fiscal position should remain resilient despite geopolitical uncertainty, supported by conservative budgeting, low debt and the government’s ability to adjust spending when required. The agency expects fiscal surpluses to average about 3 per cent of gross domestic product between 2026 and 2029.

The rating action covers Ras Al Khaimah’s long- and short-term foreign and local currency sovereign credit ratings. S&P also maintained its AA+ transfer and convertibility assessment, indicating a high degree of confidence that the emirate can meet external obligations under normal circumstances.

The agency highlighted continuity in government policy and progress in strengthening economic institutions, including the RAK Statistics Centre, as factors supporting the assessment. It said legislative and executive arrangements had contributed to policy consistency while fiscal buffers provided room for manoeuvre if external conditions deteriorated.

S&P estimated that Ras Al Khaimah’s economy expanded by about 4.3 per cent in 2025. Growth is expected to moderate to an average of roughly 2.2 per cent in 2026 and 2027 before strengthening to around 3.5 per cent in 2028 and 2029, helped by tourism and infrastructure investment.

Nominal GDP was estimated at about Dh49.4 billion in 2025 and is projected to rise to Dh50.8 billion in 2026 and Dh52.5 billion in 2027. GDP per capita was put at about $32,300 in 2025.

Tourism-related development remains a major component of the medium-term growth outlook. S&P pointed to hotel and infrastructure projects under construction, including the Wynn Al Marjan Island integrated resort, which is scheduled to open in early 2027, as contributors to investment activity and future visitor capacity.

The agency said Ras Al Khaimah’s strong net asset position partly offsets risks from contingent liabilities and forecast that interest costs would remain below 5 per cent of government revenue because of the emirate’s relatively small debt stock. That combination supports the government’s capacity to preserve fiscal flexibility even during periods of weaker external demand or market volatility.

A Ras Al Khaimah Government spokesperson said the rating and stable outlook reflected confidence in the emirate’s ability to navigate external developments while continuing its growth plans. The spokesperson also pointed to infrastructure investment and the government’s commitment to maintaining a diversified economy and prudent fiscal policy.

The latest assessment follows S&P’s November 2025 review, when it also maintained the A/A-1 rating and stable outlook. At that time, the agency expected economic growth to accelerate to just above 4 per cent by 2027-2028 from an estimated 3.5 per cent in 2024, supported by tourism, real estate, manufacturing, mining and infrastructure spending.

Ras Al Khaimah has maintained an A-range sovereign rating since 2008. S&P’s long-term A rating denotes a strong capacity to meet financial commitments, although it is more exposed to adverse economic conditions than issuers in the AA or AAA categories. The A-1 short-term rating similarly indicates a strong capacity to meet near-term obligations.

The stable outlook signals that S&P does not expect material deterioration in Ras Al Khaimah’s credit profile over the forecast horizon. The agency’s assessment rests on continued fiscal discipline, economic diversification, manageable debt and the availability of government assets to absorb shocks.

S&P also noted the government’s record of adjusting expenditure when conditions demand it, citing measures taken during the pandemic as evidence of fiscal flexibility. It expects that approach to remain important as the emirate balances large development projects with its commitment to maintaining surpluses.