Ras Al Khaimah has taken a big step forward in strengthening its economy, with S&P Global and Fitch Ratings upgrading the emirate’s credit ratings. These positive assessments reflect its impressive growth and fiscal stability.
S&P Global recently raised Ras Al Khaimah’s credit rating from ‘A-/A-2’ to ‘A/A-1’, citing strong economic growth, stable fiscal policies, and a focus on tourism development.
The emirate’s economy is expanding due to non-oil sectors like mining, real estate, ports, and economic free zones, benefiting from increased infrastructure investments across the UAE, GCC, and Indian subcontinent.
S&P forecasts a 4% average real GDP growth between 2024 and 2027, thanks to investments in tourism and infrastructure. Ras Al Khaimah’s diversified economy stands out, with manufacturing, retail trade, and construction making up 55% of its GDP. The government’s cautious fiscal management further boosts confidence in the emirate’s stability.
This comes after Fitch Ratings upgraded RAK’s credit rating to ‘A’, highlighting its robust economy and financial health. These endorsements underline Ras Al Khaimah’s appeal to global investors and its growing role in the region’s economy.
Tourism as a Key Growth Driver
Tourism is central to Ras Al Khaimah’s economic strategy. The Ras Al Khaimah Tourism Development Authority (RAKTDA) recorded 1.22 million overnight visitors in 2023, an 8% increase from 2022, with international visitors rising by 24%. Hotel occupancy also surged, reaching 74%, a 12% year-on-year growth.
The emirate plans to triple its visitors to 3.5 million by 2030, with projects like the $3.9 billion Wynn Al Marjan Island Resort, set to open in 2027, playing a pivotal role. This mega-project alone represents 40% of RAK’s GDP and is the UAE’s first to receive a commercial gaming license.
Additionally, 20 new hotels are planned over the next three years, increasing room capacity by 75%. Fitch estimates 6.2% economic growth in 2024 and 5% in 2025, fueled by the tourism boom.
Strong Financial Outlook
Analysts predict RAK’s revenue will grow from 21.5% of GDP in 2023 to 22.9% in 2024, boosted by the UAE’s corporate tax introduction. This financial growth will support key projects, further solidifying the emirate’s stability.
Attractive Real Estate Market
Just 45 minutes from Dubai, Ras Al Khaimah offers attractive property prices and strong returns on investment. Apartment yields in RAK surpass the UAE average of 5.16%, making it a popular choice for investors. Leading developer RAK Properties is driving demand with mixed-use developments, luxury homes, and premium hospitality projects.
RAK Properties’ revenue for the first nine months of 2024 reached Dh891 million, a 30% rise from 2023, with net profits up by 21%. The government recently increased its stake in the company from 5% to 34%, signaling confidence in its growth potential. Notable projects like Mina Al Arab, Bay Residences, and Gateway II Residences are attracting both local and international investors.
As of Q3 2024, RAK Properties’ market cap surged to Dh3.33 billion, tripling from early 2023. Its stock rose 15% over the past year and 76% in two years, reflecting the market’s growing trust. Despite trading 20% below its all-time high, it presents a solid entry opportunity for investors.
“RAK Properties’ projects like Bayviews and Quattro Del Mar, supported by strong government backing, position the company to meet rising demand,” said Vijay Valecha, Chief Investment Officer at Century Financial.
A Bright Future for Ras Al Khaimah
With upgraded credit ratings, growing tourism, and a thriving real estate market, Ras Al Khaimah is rapidly becoming a preferred destination for global investors. Its economic diversification, coupled with government initiatives, ensures a positive outlook for years to come.
