UAE Debt Vs Surpluses
 

Standard Chartered Middle East Daily

U.A.E. debt is at the center of attention, especially for rating agencies. Fitch Ratings is the third agency to release a paper on the UAE debt situation. Its assessment concentrates on the level of gross external debt, which it estimates at USD 170bn for the first 6 months of 2008, which is around 75% of GDP.

Dubai’s debt position has also received a lot of attention, and there seems to be a consensus that 2006 debt was around USD50bn which is just over 100% of GDP. However, it is noted that Dubai has gone ahead with most of its refinancing for this year. Our view is that the new refinancing phase for Dubai and UAE entities will begin towards the end of 2009. The overall debt position in the U.A.E. is relatively high, however it is worth noting that it is compensated by the large current account and budget surpluses which will exceed 20% of GDP in 2008, and also the country’s powerful net foreign asset position.