High debt levels among Dubai and Abu Dhabi government related entities, or GREs, present a significant risk to the sovereign balance sheets of both emirates, which may face funding cost "shocks" as they attempt to roll over $60bn worth of debt maturing this year and next, according to a new International Monetary Fund report.

The global financial and economic crisis has unveiled the fiscal and financial challenges posed by GREs, which will likely "continue to pose significant risks to the sovereign balance sheet and the financial system," the IMF said in its "United Arab Emirates: Selected Issues and Statistical Appendix" report published June 16.