UAE – Mubasher: Moody's Investors Service has downgraded Sharjah’s long-term foreign and local currency issuer ratings from ‘A3’ to ‘Baa2’, while changing the outlook from ‘Negative’ to ‘Stable’.

The downgrade of Sharjah’s rating reflects lower evaluation of its institutions and governance as well as a widening debt burden, which hiked to 33.6% of GDP in 2019 from 25.4% in 2018, according to a recent report by Moody's.

Meanwhile, Moody’s asserted that Sharjah's fiscal deficit increased to 6.1% of GDP in 2019, which is more than the budgeted GDP in 2019, mainly due to a rise in discretionary spending and accelerated payments on public infrastructure projects.

At the same time, the 'Stable' outlook reflects the resilience at the ‘Baa2’ rating level since Sharjah’s fiscal strength is expected to further deteriorate.