Ras Al Khaimah GDP likely to expand at 3.3% this year
Ras Al Khaimah's economic growth will weaken modestly to average 3.3 per cent in 2025-2026, S&P Global Ratings said on Tuesday.
The ratings agency affirmed the emirate's sovereign credit rating, announcing its foreign currency and local currency at A/Stable/A-1.
Thereafter, S&P expects real GDP growth to accelerate to average 4.3 per cent in 2027-2028 on the back of a strong performance in tourism, real estate, manufacturing, and mining.
Wholesale and retail trade and manufacturing — which make up 50 per cent of RAK's exports on average — together contribute around 45 per cent to RAK's real GDP. 'RAK's diversified non-oil economy and ongoing infrastructure projects will continue to support its medium-term growth trajectory beyond 2026,' S&P said.
The agency expects real GDP growth to remain just above 4 per cent annually in 2027-2028 and GDP per capita to strengthen to about $32,800 by 2028. 'We expect upcoming tourism projects and the related infrastructure spending to help strengthen RAK's mining sector, as well as its economic free zones, airport, and real estate sector,' the ratings agency said.
By far the largest of the tourism projects is the Wynn Al Marjan Island integrated resort, with the overall cost amounting to about 40 per cent of GDP. The resort is set to open in early 2027 and has been awarded the commercial gaming operator's licence — the first to be granted in the UAE. There are also plans to open about 20 new hotels in the next two-to-three years, resulting in a projected 75 per cent increase in hotel room capacity. To mitigate the risk of overcapacity, the authorities envisage targeting a wider market and increasing the variety of tourism offerings.
S&P also expects positive momentum in RAK's real estate sector, driven by transactions relating to tourism, industry, and investment, especially on Marjan Island. The island has recorded significant growth in primary residential sale prices in the past two years. RAK's mining sector, which contributes about 25 per cent of the emirate's exports, continues to benefit from infrastructure projects within the UAE and GCC. One of the world's largest limestone quarrying companies, Stevin Rock, which is 100 per cent owned by the RAK government, supplies rock to large construction and reclamation projects within and outside the UAE, including local projects in RAK and property development projects in Abu Dhabi and Dubai.
S&P believes that the government's strong net asset position partly mitigates the risk of contingent liabilities. The RAK government's gross debt was a low 8 per cent of GDP in 2024 and this includes a $1 billion sukuk that the government refinanced in March 2025. Liquid assets of an average 28 per cent of GDP over 2025-2028 more than offset government debt. RAK's liquid assets are predominately in cash and RAKBANK stock. 'Although the government has increased its overall stake in RAKBANK and is a majority shareholder, we view this holding as opportunistic rather than strategic, and ultimately a timely source of funding for the government if it needs it. We forecast that the government's interest burden will remain less than a low 5 per cent of government revenue due to its small debt stock,' the agency said.
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