Abu Dhabi: The head of Abu Dhabi’s Department of Economic Development (DED) said he expected to see improved credit ratings for the emirate as oil prices pick up, after Moody’s Investors Service confirmed on Saturday Abu Dhabi’s ratings at Aa2, assigning a negative outlook.

Ali Majed Al Mansouri, chairman of the Abu Dhabi DED, described the Aa2 rating as excellent.

On the negative outlook assigned, he said, “I think this is a short cycle, and we’re coming out of the bottom of low oil prices. Today, Brent recorded a $48 (Dh176) level, so we’re coming out of the bottleneck.

I think the rating will improve in the future. Oil prices were in the 20s and today they’re at $48, heading to $50 and even above that, so this will have a large impact on the ratings.”

On Saturday, Moody’s affirmed Abu Dhabi’s credit rating, citing “very large fiscal buffers in the form of diversified offshore investments, which will support economic and fiscal resilience during a period of lower oil prices and subdued growth.”

The agency, however, downgraded Saudi Arabia, Oman, and Bahrain.

The chairman said it was easy for oil prices to reach $60 to $70 over the next 12 months, saying that Abu Dhabi’s government can manage its finances with such levels of oil prices.

“Today, we’re impacted by lower oil prices, and that’s a fact, and we are affected by the economic slowdown in China and Europe but this is a short term cycle. On the long term, I think growth will pick up,” he said.

UAE and Japan

Al Mansouri was speaking at the fourth session of the Abu Dhabi-Japan Economic Council, which aimed to boost ties between the UAE and Japan, and encourage further investments from both sides.

In his speech, the chairman said the UAE is the second largest exporter of crude oil to Japan, with a share of 25 per cent of Japanese crude imports in 2015.

Japanese exports to the UAE reached about Dh33 billion in 2015, representing 37 per cent Japan’s exports to the GCC, while Japanese imports from the UAE declined 44 per cent during the year to reach Dh88 billion.

He pointed that Japan’s foreign direct investment in the UAE is relatively limited, and that the DED is in talks with Japanese officials about boosting their investments in UAE.

“Traditionally, trade relations between the UAE and Japan have been focused on the energy sector over the past 40 years, so, naturally, this is the easy direction to take. Today, we see opportunities outside the energy sector, for instance in infrastructure, education, and aviation and airports.

The energy sector is obviously still important but we’re discussing with Japan opportunities in other sectors as well,” Al Mansouri said.

The event was also attended by Yosuke Takagi, Japan’s State Minister of Economy, Trading, and Industry.