DUBAI (Reuters) – Dubai continues to service its debt and is ready to take on more if needed, an economic official said on Wednesday, adding that current debt was $124 billion.
“We continue to service the debt on time, as scheduled. We are ready to take on more debt, if need be,” Raed Safadi, the chief economic advisor at Dubai’s Department of Economic Development, said at an event.
His comments came after Reuters had reported on Sept. 10, citing sources, that the government of Dubai has held talks with banks about a potential issue of U.S. dollar-denominated bonds, in what would be its first international debt sale since 2013.
Rating agencies have warned Dubai about the debt of state-owned entities amid an economic slowdown in the region.
The size of the Dubai economy was 398.5 billion UAE dirham ($108.50 billion) at the end of 2018.
Fitch said earlier this month that a significant proportion of $23 billion in loans to Dubai government-related entities due to mature by end-2021 may be restructured again.
“We have proven time and time again that actually investments Dubai realizes are worthy investments and the rates of return more than compensate for covering the debt servicing burden and of course create growth and drives growth,” said Safadi.
Dubai’s economy was hit hard in 2009, when a global credit crisis caused its real estate market to crash and threatened to force some of its state-linked companies to default on billions of dollars of debt.
Dubai has seen another slump in the real estate market over the past few years, but the downturn has not been as severe as the one in 2009.
Reporting by Alexander Cornwell; Editing by Saeed Azhar & Kim Coghill