"Moody's" confirms its classification of the UAE, and the outlook is stable

Moody's credit rating agency confirmed its rating of the UAE at (AA2), while maintaining a stable outlook. This sovereign rating is the strongest of its kind in the region.

According to an assessment released by the agency yesterday, Moody's said that there are several factors that support the classification, one of which is the muted impact of the Covid-19 health pandemic on the government's financial strength, which can be attributed to the effective government response in the battle against the global epidemic.

The stable outlook reflects the existence of balanced risks, consistent with the stable outlook for the strong sovereign rating of the Emirate of Abu Dhabi.

In a recent report, the agency said that confirmation of the UAE's credit rating is supported by "a relatively suppressed effect of the pandemic on the fiscal strength of the federal government."

She added that the UAE's credit rating is supported by Moody's assumption of unconditional support from Abu Dhabi to the federal government.

According to the agency, the stable outlook for the UAE reflects a general balance of risks, consistent with the stable outlook for the sovereign rating of Abu Dhabi.

It also indicated that the UAE's revenue shock resulting from the pandemic had been compensated to a large extent through spending cuts.

Which highlights the ability to adjust.

She added that some geopolitical tensions have subsided;

But it remains a pressure factor on the credit rating of the UAE.

A survey on Tuesday showed that business conditions in the non-oil private sector in the UAE continued to improve in April.

New business growth reached its highest level in 20 months;

And this is at a time when the economy of the Gulf country is recovering from the Covid-19 pandemic.

The IHS Market UAE PMI, adjusted in light of seasonal factors, which covers the manufacturing and services sectors, rose to 52.7 in April from 52.6 in March.

It was the highest level since July 2019 and the fifth month in a row that the 50 threshold between growth and contraction has been crossed.

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