The world’s top three credit rating agencies – Fitch Ratings, S&P Global and Moody’s Investors Service – have assigned strong sovereign credit rating for the UAE as it continues to strengthen economic diversification and boost non-oil sector growth.
It reflects international confidence in the strength of the UAE economy and the sustainability of its fiscal policies, the Ministry of Finance said on Wednesday, state news agency Wam reported.
A sovereign credit rating measures a government’s ability to repay its debts. It gives insights into the level of risk associated with investing in the debt of a particular country.
S&P announced on June 17 that it assigned the UAE’s sovereign rating at “AA” with a stable outlook. Moody’s affirmed the UAE’s rating at “Aa2” with a stable outlook in its annual review. “Aa” ratings are considered high quality and subject to low credit risk. “Aa2” is the third-highest rating on Moody's scale. Fitch also affirmed the UAE’s rating at “AA-” with a stable outlook, on June 24.
The consensus highlights the UAE’s “advanced fiscal standing” and galvanises its position among the few countries globally with strong sovereign credit ratings from the three agencies, the ministry said.
“The affirmation of the UAE’s strong sovereign rating by the world’s top three international credit rating agencies, and their consensus on a stable outlook, reflects the deep-rooted international confidence in the resilience of our national economy and the efficiency of our fiscal policies,” said Sheikh Maktoum bin Mohammed, First Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance.
The UAE’s economy grew by 4 per cent last year, driven by a strong expansion in its non-oil sector. The country's real gross domestic product reached Dh1.776 trillion ($484.7 billion), the Ministry of Economy said this month.
The non-oil economy grew by 5 per cent annually to Dh1.34 trillion, accounting for more than 75 per cent of the country's economic activity, while oil-related activities contributed Dh434 billion to the overall economy.
The UAE Central Bank expects real GDP to expand by 4.4 per cent in 2025 and increase to 5.4 per cent in 2026, it said in a report on Wednesday. This performance is driven by the "expected robust dynamism" of non-hydrocarbon activities and a "robust increase" in the hydrocarbon sector following updated Opec+ production plans, the regulator said.
Non-hydrocarbon GDP is expected to grow by 4.5 per cent in 2025 and in 2026, while the hydrocarbon sector is projected to grow by 4.1 per cent in 2025, followed by an expansion of 8.1 per cent the following, it estimated.
Meanwhile, S&P Global Market Intelligence on Thursday released a more optimistic growth projection. It expects the Emirates’ economy to accelerate to 5.4 per cent in 2025 and 6.5 per cent the following year, supported by the output rebound in the oil sector and strength of domestic demand.
The UAE, the Arab world's second-largest economy, has been focusing heavily on diversifying away from oil by developing sectors such as technology, manufacturing, tourism, trade and innovation. The country has introduced several reforms including longer-stay residence visas as well as new visa categories to attract more talent.
The UAE's non-oil trade hit a record Dh3 trillion last year − up 14.6 per cent year-on-year, boosted by its Comprehensive Economic Partnership Agreement programme. Deals that the Emirates has signed with nations from Colombia to Australia have contributed Dh135 billion to the country's non-oil trade, an increase of 42 per cent compared with the previous year.
The ratings confirm the UAE’s ability to diversify and boost non-oil revenue, maintain sound fiscal discipline, manage risks effectively and uphold prudent fiscal policies. All of these factors have contributed positively to economic stability and sustained growth across various sectors, the Ministry of Finance said.
The “AA-” rating reflects the UAE’s moderate consolidated government debt, strong net external asset position and high GDP per member of the population, Fitch said. This benefits from Abu Dhabi’s sovereign net foreign assets, which are among the highest of Fitch-rated sovereigns, the ratings agency added.
The Fitch report noted the elevated geopolitical risks in the region, while affirming the UAE’s strong ability to withstand short-term disruptions, supported by its substantial fiscal and external buffers.
The agency projects the UAE’s GDP to rise by 5.2 per cent this year, buoyed by a 9 per cent rise in oil production in Abu Dhabi. It estimates non-oil growth of more than 4 per cent, despite “mounting global challenges”.
