Fitch Ratings affirmed Ras Al Khaimah's long-term foreign-currency issuer default rating (IDR) at A+ with a stable outlook, the credit rating agency said in a statement. The emirate’s rating is driven by “continued solid fiscal position, including low public-sector debt, the benefits of its membership of the United Arab Emirates […] and high GDP per capita,” the statement read.

Fitch expects GDP growth to come in at an average of 6.1% in 2025-2026, down from an estimated 6.7% growth rate in 2024. The agency also expects Ras Al Khaimah’s Wynn Al Marjan Island — the UAE’s first licensed integrated resort — to raise the emirate’s GDP growth by an average of 2 percentage points between 2024 and 2026. The cost of the resort, now estimated at USD 5.2 bn, represents 40% of the emirate’s GDP in 2024 — up from an initial estimate of 30% of GDP.

Revenue in the emirate is also on the rise: RAK’s total revenue increased to 26.4% of GDP in 2024, up from 21.3% in 2023, driven by a surge in real estate revenue that can itself be attributed to land sales in Al Marjan Island. Meanwhile, total expenditure increased to 26.4% last year, up from 18.2% in the previous year, which was mostly down to a 5.6 percentage point increase in the emirate’s capital expenditure.

However, the agency expects total revenue to decline to an average of 20.4% in 2025 and 2026 “as operating revenues decline owing to the accounting treatment of land sales, while capex remains high,” the report reads. This would also affect the accrual basis fiscal balance, with the agency expecting it to shift to a deficit starting in 2025, averaging 5.3% of GDP over 2025 and 2026.

This will be temporary: The agency expects the fiscal deficits across the next two years to be a temporary occurrence, saying that the significant investments in the Wynn resorts have been financed without any major debt accumulation and will lead to a boost in future revenues for the emirate.

There are factors that could lead to a downgrade for RAK: The agency cited possibilities of lower non-oil growth in the UAE and any potential geopolitical shock that “negatively affects economic, social or political stability” as factors that could lead to a negative rating action for RAK. In addition, a weakening in public finances due to “sustained increases in spending or lower SOE profits” could lead to prolonged budget deficits and a considerable surge in net public debt — which could, in turn, bring down the emirate’s rating.

There’s also room for improvement: “Improvement in structural factors, such as World Bank Governance Indicators at the UAE level” or economic growth that surpasses Fitch’s forecasts could lead to a positive rating action, the agency wrote.

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