Abu Dhabi's asset base remains strong | ZAWYA MENA Edition:
Abu Dhabi enjoys a solid asset base, which could help finance its decades' worth of moderate fiscal deficits, Fitch Ratings said on Wednesday.
It estimated that the UAE capital's sovereign net foreign assets to be the second-largest among Fitch-rated sovereigns and government debt remains modest.
"With an estimated fiscal break-even oil price of $60 a barrel in 2019, Abu Dhabi's assets could finance decades' worth of moderate fiscal deficits," the ratings agency said in a note.
It forecast Abu Dhabi's financing requirement or cumulative deficit to total $40 billion in 2020-21.
"We expect the authorities to retain a preference for financing the deficit through debt issuances rather than unbudgeted assets drawdowns, and debt will keep rising moderately over the next three years. We estimate the value of Abu Dhabi Investment Authority [Adia] assets at end-2019 at more than $570 billion," said Jan Friederich, head of sovereigns for the Middle East and Africa at Fitch Ratings.
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