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S&P Global kept Ras Al Khaimah’s rating at A/A-1 with a stable outlook, signaling that the emirate’s fiscal fortress is strong enough to withstand the direct impact of Iranian strikes on UAE soil, according to the agency’s latest ratings update.
That’s the second emirate getting a vote of confidence from the agency, with Abu Dhabi also seeing its AA/A-1+ rating affirmed last week.
The rationale: The affirmation rests on the government’s exceptionally low debt (7.4% of GDP) and net asset position of 23% of GDP, providing a critical shock absorber against the immediate fallout of the US-Iran conflict. S&P believes these buffers, combined with the UAE’s broader financial support framework, will allow RAK to keep its head above water even as regional volatility spikes.
But growth is getting a major reduction: The agency slashed its 2026 growth forecast for RAK to 2.0%, significantly down from its previous 3.6% estimate. The logic? While the strikes haven’t leveled infrastructure, they have wounded the sentiment-sensitive sectors — tourism, real estate, and manufacturing — that make up 60% of RAK’s economy.
The Strait of Hormuz is the pain point: RAK’s mining exports — which account for 15% of the economy — are more vulnerable to maritime disruption. S&P warns that while RAK can still service markets like India and Bangladesh, a prolonged closure of the Strait of Hormuz will eventually trigger credit strain in the mining sector’s performance.
What happens to the Wynn? The USD 5.8 bn Wynn Al Marjan Island resort — the UAE’s first licensed gaming project — is the elephant in the room, representing a massive 42% of RAK’s GDP. While S&P expects the resort to open as scheduled in 2027, it warns that any long-term shift in real estate demand or regional security perceptions could jeopardize the project’s capacity to serve as the emirate’s primary diversification engine.
As far as we know, construction of the resort only saw a temporary halt but has resumed since last week.
Looking ahead: RAK is expected to run fiscal surpluses averaging 3.0% of GDP through 2029. This outlook will be supported by the introduction of corporate and gaming taxes from 2027, as well as dividends from state-owned enterprises like RAK Ports and Marjan, provided the security situation de-escalates.
