Abu Dhabi stimulus confirms fiscal adjustment is over: Fitch | ZAWYA MENA Edition

Abu Dhabi stimulus confirms fiscal adjustment is over: Fitch | ZAWYA MENA Edition:

"Abu Dhabi's new economic stimulus programme will have limited sovereign credit impact given the sovereign's strong balance sheet and low fiscal break-even oil price, Fitch Ratings says. But it highlights the winding down of fiscal adjustment and suggests that the fiscal policy-making framework has seen little improvement during the period of low oil prices, despite sharp spending cuts and increases in non-oil revenue.

Sheikh Mohammed bin Zayed, Abu Dhabi's crown prince, earlier this month approved a three-year stimulus package worth AED50 billion (USD13.6 billion), or around 6% of Abu Dhabi GDP. Objectives include job creation, increasing tourism, and improving private sector development. Full details have yet to be set out and government departments will spend the next three months preparing their spending plans. To support the private sector and attract investment, they have also been instructed to speed up payments to private sector suppliers and ease licensing requirements and regulations for companies.

Abu Dhabi's fiscal break-even oil price is among the lowest for Fitch-rated oil producers, estimated at slightly above USD60/bbl, and its fiscal and external positions are among the strongest, with sovereign net foreign assets estimated at 281% of GDP last year, and government debt at just 8% of GDP."



'via Blog this'