S&P lowers Sharjah

S&P said it lowered its long-term foreign and local currency sovereign credit ratings on the Emirate of Sharjah to BBB- from BBB.

“The downgrade reflects our view that Sharjah’s fiscal position is weakening. We expect the government’s interest burden will increase to about 17% of revenue by 2023, up from about 12% in 2020, as interest payments rise in line with higher debt levels,” S&P said in a press release.

Despite S&P’s forecast for an economic contraction in 2020, Sharjah's economy remains relatively diversified compared with other sovereigns in the region, which should support a modest recovery in growth over the forecast period, the agency said.

The outlook is stable.

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