Strong Economy in the Face of Challenges
- 20 February 2016
The recent report by the Moody’s credit rating agency highlighted that the economy of the UAE, especially Abu Dhabi is showing a good performance. The financial assets of Abu Dhabi helped it curb the repercussion of the slump in oil prices, noted the agency, adding that these reserves will help the Emirate ward off for the next ten years the long-term undesired effects of the drop in oil revenues. The report also points out to the resilience of the UAE economy and its strong foundations.
The assignment by Moody’s of an AA2 rating to the government of Abu Dhabi and its estimation of a low impact of the drop in oil prices on the emirate’s rating reflects that its economy is showing resilience and financial strength. Based on sound policies, Abu Dhabi managed to maintain its positive rating. This was also achieved thanks to its potential and inherent assets as well as its exceptional economic development model which enabled it to take leading positions in global rankings.
Moody’s ascribed Abu Dhabi’s performance to four reasons, most important of which is the huge reserves that were accumulated out of surpluses in recent years, well-designed policies, political stability and higher per-capita income. The agency also noted that the government and financial institutions have high levels of liquidity, which further fosters financial and monetary stability in the country. This liquidity is a positive factor that boosts confidence in the economy, attracts investments and boosts present and future growth.
The confirmation by Moody’s of the ability of Abu Dhabi’s economy to fend off the impact of the drop in oil prices for the next ten years inspires optimism and confidence in a brighter future. These forecasts are not only limited to Abu Dhabi. The same thing can be said about the UAE economy as a whole in light of the policies adopted to diversify economic resources in preparation for the post-oil era and the sustainable comprehensive development projects launched across the country under the wise leadership of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE (may God protect him) and His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai (may God protect him) and His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE armed forces (may God protect him).