RIYADH: The emirate of Sharjah in the UAE is expecting a budget deficit in 2022, amounting to 9.2 billion dirhams, a statement revealed, citing its finance department.
This figure represents an estimated 7 percent of the emirate’s gross domestic product, as opposed to the 8.8 percent recorded in the corresponding period in 2021.
Should the government achieve this target, the fiscal gap will remain among the largest in recent years.
The government’s debt is anticipated to rise by more than 50 percent of GDP by the end of the year, up from 46 percent of GDP in 2021 and 15 percent in 2017 respectively.
Projections indicate that Sharjah’s debt will go beyond 60 percent of GDP and 800 precent of government revenue over the span of the next three years, the statement disclosed, citing investors service Moody’s.
Sharjah’s eroding fiscal strength is anticipated to increase its exposure to potential shocks as a result of constraints in its fiscal and financial flexibility.
This is especially true in the case of weakening debt affordability metrics and surging global interest rates.