International credit ratings agency S&P Global has recently upgraded Ras Al Khaimah’s rating from ‘A-/A-2’ to ‘A/A-1’ with a stable outlook. Ras Al Khaimah’s real GDP growth will average about 4 percent over 2024-2027 on ongoing tourism and infrastructure projects, said the agency. Despite high infrastructure expenditure, it also expects the emirate’s government to run fiscal surpluses supporting its net asset position of around 18 percent of GDP.
“The upgrade reflects our view that the solid pipeline of tourism-related development projects in RAK will support the emirate’s improving growth momentum,” added S&P.
The agency also added that Ras Al Khaimah’s mining sector along with economic free zones, real estate, and ports will benefit from strong non-oil growth and infrastructure spending in the UAE, GCC, and the Indian subcontinent.
RAK’s economy more diversified than most peers
In its latest rating action report, S&P Global said that Ras Al Khaimah’s economy is more diverse than most peers’ in the GCC region. There is no single economic sector that primarily drives the emirate’s economic activity, with manufacturing, wholesale and retail trade, and construction or real estate activities together contributing about 55 percent of GDP.
“Although oil prices still spur economic cycles through fluctuations in demand from Ras Al Khaimah’s oil-dependent trade partners, this is generally less pronounced than for sovereigns directly dependent on oil,” added S&P.
GDP per capita to reach $32,800 by 2027
S&P expects Ras Al Khaimah’s real GDP to expand by more than 4 percent annually in 2025-2027 and GDP per capita levels to strengthen to about $32,800 by 2027, compared to around $30,000 in 2024. Upcoming tourism projects and infrastructure spending will help strengthen Ras Al Khaimah’s mining sector as well as its economic free zones, airport, and real estate sector.
The hospitality sector contributes 4 percent of GDP and the real estate 7 percent, but these proportions will likely increase with new projects ramping up.
Tourism sector surge
By far the largest of the tourism sector projects in Ras Al Khaimah is the Wynn Al Marjan Island resort, with an overall cost of about 40 percent of GDP. The Wynn project is a joint venture between Wynn Resorts (40 percent) and two Ras Al Khaimah state-owned enterprises. It is expected to open in early 2027.
The development has also been recently awarded the commercial gaming operator’s license, the first in the UAE. There are also plans to open about 20 new hotels in the next two to three years, resulting in around a 75 percent increase in hotel room capacity.
“We also expect positive momentum in the emirate’s real estate sector driven by tourism, industrial, and investment-related transactions, especially on Marjan Island, which has already recorded significant growth in primary residential sale prices in the past two years,” added S&P.
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Mining sector to grow further
S&P added that Ras Al Khaimah’s mining sector, which contributes about 25 percent of the emirate’s exports, continues to benefit from infrastructure projects within the UAE and the region. Stevin Rock, one of the world’s largest limestone quarrying companies, supplies rock to large construction and reclamation projects within and outside the UAE, including local projects in the emirate and property development in Abu Dhabi and Dubai.
“We understand that this year, export volumes could face some headwinds due to political uncertainty in Bangladesh. However, demand from other export markets—such as India and Kuwait—along with local sales, continue to increase,” added S&P. Strong mining sales are also evident in continuous trading volumes at the Saqr Port.
