S&P downgrades Sharjah

S&P said it lowered the long- and short-term foreign- and local-currency sovereign credit ratings on the Emirate of Sharjah, a member of the United Arab Emirates, to BBB+ and A-2 from A and A-1, respectively.

The outlook is stable.

The downgrades reflect an accumulation of government debt that was higher than expectations for 2016, S&P said.

The downgrades also consider a revised assumption of elevated fiscal expenditures from 2017 to 2020, which will lead to a slower fiscal consolidation path, the agency said.

The government's balance sheet has been able to absorb numerous pressures over recent years, S&P added, but this has resulted in a material increase in government debt.

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