UAE

April 2008 | Ratings Update

The UAE's short-term political risk rating has fallen slightly from 78.1 to 77.5 this month, on the back of a slight downgrade to its score in the social stability category. This reflects our revised inflation forecasts - we now expect CPI to remain at 10.0% y-o-y by the end of 2008, due to a combination of high food prices, ongoing tightness in the housing market and surging petrodollar liquidity. Although the effects of inflation on UAE citizens are partly mitigated by food subsidies and cheap land allocations, rising prices are stirring unrest among the country's low-paid expatriate labourers and recent

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