Ratings agency S&P estimates that Dubai's gross general government debt will reach about 77% of GDP in 2020, a figure conflicting with that of the Dubai government.
"S&P Global Ratings expects Dubai's economy will contract sharply by around 11% in 2020, owing in part to its concentration in travel and tourism, two of the industries most affected by COVID-19," the agency wrote in a client note last week. It sees the economy "only recovering to 2019 levels by 2023."
"We estimate, based on publicly available information, that Dubai's gross general government debt will reach about 77% of GDP in 2020," which amounts to 290 billion AED , S&P said. Dubai's government, however, released its own assessment in a rare debt issuance in September to reveal a debt figure significantly lower: 123.5 billion AED as of end-June, or roughly 28% of GDP.
"Sovereign debt is only that which is legally responsible for debt being extended to the Government, its public institutions and commercial debt that carries its guarantee," Al-Shaikh said in response to S&P's report. "GREs are commercial entities that borrow on commercial terms and it's completely up to the Sovereign to decide if it will assist them financially or not.
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