Prudent Abu Dhabi adjusts development strategy
Prestige property projects reviewed, some put on hold; Abu Dhabi responding to weaker market, global uncertainty; But retrenchment different from Dubai crisis; Government remains very strong financially; Strategy change may please international investors
November 10, 2011 4:07 by Reuters
…around $600 billion.
Affirming its AA credit rating of Abu Dhabi in September, Fitch Ratings estimated the emirate would enjoy a budget surplus amounting to a double-digit percentage of GDP this year. Citibank forecasts a surplus of 60 billion dirhams ($16.3 billion), or 8.2 percent of GDP, with the budget staying in surplus for the foreseeable future.
“We believe that Abu Dhabi has the fiscal space to pursue its economic priorities and support direct government debt comfortably,” Citibank said.
Raza Agha, senior Middle East and North Africa economist at RBS, said in a report: “We view the reported slowdown/consolidation in Abu Dhabi as a long term credit positive…We feel the emirate would be much better served investing at a lower pace, and perhaps in a more focused manner that improves the quality of life for locals. Beyond that, headline grabbing projects and investments are unlikely to yield dividends even in the long run and may actually serve to create greater uncertainties in the short term.” (By Stanley Carvalho; Editing by Andrew Torchia)