DUBAI: The emirate of Sharjah’s economy is expected to rebound by 4 percent in 2021, ratings agency S&P Global said.
This recovery, which will remain steady at 2.2 percent on average until 2024, is further supported by a faster return to “domestic normalcy in the UAE” due to the country’s accelerated COVID-19 vaccinations.
But the ratings agency said Sharjah’s headline fiscal deficit will widen further this year because of high levels of capital spending – 10 percent of GDP, compared to 8 percent in 2020.
“We expect Sharjah to remain in fiscal deficit averaging 7.4 percent of GDP over our forecast period through 2024,” the report said, adding it does not expect capex to decrease over the forecast period.
Despite large fiscal deficits, S&P said net general government debt will remain below 60 percent of GDP through 2024 given some moderation in government expenditure.
S&P affirmed its ‘BBB-/A-3’ rating of the northern emirate maintaining a stable outlook.