Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
The credit ratings of Abu Dhabi, the UAE, and Ras Al Khaimah (RAK) have remained unchanged, underscoring their resilience to regional conflicts and lower oil prices, Fitch Ratings said in its latest analysis.
The agency attributed this stability to sound fiscal positions, ongoing economic reforms, and robust external balance sheets across the region.
Fitch noted that despite heightened geopolitical tensions, the conflicts have been largely contained to unrated sovereigns and have had minimal credit impact. It added that higher oil production under rising OPEC+ quotas and ongoing state-led investment in non-oil sectors continue to support growth across the Gulf.
Fitch affirmed Abu Dhabi’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘AA’ with a Stable Outlook, with the most recent review completed on June 23, 2025. The agency highlighted the emirate’s exceptionally strong fiscal and external metrics, among the best of all Fitch-rated sovereigns, and one of the lowest government debt levels globally.
Fitch expects Abu Dhabi to maintain budget surpluses above 8% of GDP through 2027, supported by large oil production capacity, fiscal prudence, and growing non-oil sectors. The emirate’s sovereign net foreign assets (SNFAs) remain among the highest in the world.
Non-oil GDP growth is forecast at 5% in 2025, with oil GDP expanding by 5.8%.Oil GDP is expected to grow at 10% in 2026. “Rising OPEC+ production quotas will compensate the impact of lower oil prices on the budget,” Fitch Ratings said.
At the federal level, the UAE retained its ‘AA−’ rating with a Stable Outlook. The country’s diversified economic base, prudent policy framework, and significant fiscal reserves underpin its overall stability.
Fitch credited the UAE’s federal and emirate-level fiscal discipline and ongoing diversification initiatives for maintaining stability despite oil price volatility.
Debt/GDP will be broadly stable at close to 25% of GDP in 2025-2027, Fitch Ratings said. The report observed that fiscal surpluses are expected to persist through 2027, reflecting the UAE’s low debt burden and continued sovereign wealth accumulation.
Ras Al Khaimah’s rating was affirmed at ‘A+’ with a Stable Outlook. Fitch said RAK continues to benefit from its solid fiscal position, low public-sector debt, and membership in the UAE federation, while maintaining high GDP per capita relative to peers.
The emirate is forecast to post a temporary fiscal deficit of 5.2% of GDP in 2025-2026, due mainly to higher capital expenditure linked to its investment in the Wynn resort. However, Fitch described the deficit as short-term and non-structural, expecting a return to surplus by 2027.
Fitch concluded that the MENA region as a whole has entered its longest period without a downgrade since 2015. The average rating has improved slightly despite lower oil prices and ongoing conflicts, with no sovereigns rated below ‘CCC+’ for the first time since 2019.
