Banks in the United Arab Emirates face new headwinds due to a weakening global economy and Abu Dhabi's move to scale back spending and delay construction projects, Fitch Ratings said on Tuesday.
In a report, Fitch said the global slowdown will affect key sectors such as trade, tourism and services while a fragile real estate sector and problems at Dubai state-linked firms and other companies "pose significant asset quality challenges".
The ratings agency also cited the short-term impact of slowing projects in the emirate of Abu Dhabi which has taken a tough line on budget spending and jettisoned non-core infrastructure plans, such as building local branches of the Guggenheim and Louvre museums.
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