S&P Raises UAE Credit Rating with Stable Outlook
In a move reflecting growing confidence in the strength of the UAE economy, S&P has announced an upgrade to the UAE’s credit rating, accompanied by a stable outlook. Economic growth in the UAE is expected to continue at a rate of around 4% between 2025 and 2028, supported by increased activity in non-oil sectors and a gradual rise in oil production. The agency maintains long-term and short-term credit ratings at AA/A-1+, reflecting the positive performance achieved by the country despite local and global challenges.
Strong Economic Growth Forecast
S&P’s forecasts indicate that the UAE’s economy is set to open up good growth prospects, with GDP expected to rise by 4%. This growth will primarily depend on improved activity in non-oil sectors such as construction, financial services, and transportation. Additionally, the increase in oil production due to the easing of OPEC+ restrictions will contribute to bolstering these forecasts, with crude oil production expected to reach around 3.5 million barrels per day by 2028.
Financial Stability and Deficit Projections
According to the data, S&P anticipates that the UAE will achieve moderate fiscal surpluses of up to 3.2% of GDP through 2028, assuming Brent crude prices remain stable. On the other hand, government debt levels are expected to remain stable at around 28% of GDP. These figures reflect the strength of the UAE’s financial and external conditions in the coming years.
Stable Outlook and Positive Indicators
The UAE enjoys a solid base of government assets, which provides protection against fluctuations in oil prices. The stable outlook provided by S&P reflects expectations that the country will continue to implement prudent fiscal policies, contributing to an increase in net assets to approximately 177% of GDP by 2028. Estimates suggest that ongoing reforms in the business environment will enhance the attraction of foreign investments and talent.
S&P confirms that under the current circumstances, the possibility of further rating upgrades remains. It added that improving the effectiveness of monetary policy through the development of local capital markets could have a positive impact on the UAE’s credit rating.