The United Arab Emirates has achieved a long-term credit rating of AA- with a stable outlook, according to Fitch Ratings. This assessment reflects the favorable financial conditions in the country, including a strong capacity to manage government debt and high net assets. The rating also highlights the strength of the economies of Abu Dhabi and Dubai, enhancing the UAE’s attractiveness as an investment destination.
Fitch Rating Analysis
Fitch revealed in an official statement that the UAE’s AA- rating with a stable outlook reflects relatively low government debt and the strength of the country’s external assets. The agency noted that Abu Dhabi’s net sovereign external assets are among the highest compared to other countries. This reflects the stability of public finances, which is a key attraction for investors in global markets.
Public Budget and Future Expectations
One interesting point relates to Fitch’s expectations for the UAE’s consolidated budget, forecasting a surplus of 7.1% of GDP in 2024. This surplus comes at a time when oil prices are projected to be between $45 and $50 per barrel. The agency also indicated that the expected surplus would help mitigate risks associated with fluctuations in the oil market, especially in light of potential challenges that may arise in the future.
Debt and Financial Risks
Fitch expects the total unified government debt of the UAE to reach 24.9% of GDP by the end of 2024, rising slightly to 25.4% in 2025 and 2026. Despite the disparities among the various emirates, the overall trend indicates stability in debt levels, with expectations of a gradual decline in Dubai’s debt. Abu Dhabi will play a crucial role in these dynamics by initiating the issuance of local currency bonds to finance new projects.
Rating Summary
The United Arab Emirates remains a unique model of financial performance in the Gulf, thanks to its diverse sources of income and effective strategies. With a rating of AA- and a stable outlook, Fitch confirms that the UAE continues to project a positive image in global financial markets. This rating will enhance investor confidence and promote sustainable growth, reflecting the country’s ability to tackle future challenges and maintain its financial stability.
| Fitch Ratings for the UAE | ||
|---|---|---|
| Type of Rating | Rating | Status |
| Long-term sovereign credit rating in foreign currency | AA- | Confirmed |
| Short-term sovereign credit rating in foreign currency | F1+ | Confirmed |
| Country ceiling rating for the UAE | AA+ | Confirmed |