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S&P reaffirms Sharjah’s stable outlook

Global credit rating agency Standard & Poor’s has affirmed the Emirate of Sharjah’s A/A-1 sovereign credit ratings long- and short-term, foreign and local currency, on the basis of Sharjah’s strong nominal GDP (gross domestic product) growth.

The agency expects that Sharjah’s nominal GDP growth will remain strong, against the government’s relatively high interest burden. S&P also stated that Sharjah had demonstrated its fiscal flexibility by meeting new challenges without deviating from its fiscal targets.

S&P estimated real economic growth at about 3.5 percent for 2015, down from its estimate of 5.5 percent for real GDP growth in 2014. The agency pointed out that the real economy in Sharjah is supported by a relatively diverse production base, with real estate and business services accounting for about 20 percent; manufacturing 16 percent; mining, quarrying, and energy 13% percent; and wholesale and retail trade 12 percent.

The Sharjah government has a wide range of initiatives in place to help develop its economy and has launched a broad range of initiatives to encourage inward investment and make it easier for investors to establish businesses.

Global financial institutions gave Sharjah’s fiscal policies a strong vote of confidence last year, when demand for the Government of Sharjah’s US$7.85 billion (AED 29b) sovereign sukuk exceeded the issue by ten times the volume.

S&P began assigning sovereign credit ratings for the Emirate of Sharjah last year.

Source: S&P

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