Moody's cuts Sharjah, view to stable

Moody's Investors Service said it downgraded the long-term foreign and local currency issuer ratings of the government of Sharjah to Baa2 from A3 and changed the outlook to stable from negative.

“The downgrade to Baa2 reflects Moody's lower assessment of Sharjah's institutions and governance strength than previously assessed. Evidence of significant slippage on fiscal targets and incurrence of contingent liabilities denotes more reactive fiscal policymaking than previously assessed,” the agency said in a press release.

Moreover, a significant widening of the fiscal deficit has contributed to a much faster than expected accumulation in debt last year and, in the absence of any fiscal consolidation measures, is likely to result in a markedly higher debt trajectory over the medium term, indicating weaker fiscal strength than Moody's had previously estimated.

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