S&P affirms UAE ‘AA/A-1+’ ratings with stable outlook

S&P Global Ratings affirmed its ‘AA/A-1+’ long- and short-term foreign and local currency sovereign credit ratings on the UAE with stable outlook.

The stable outlook reflects the agency’s view that the UAE's large fiscal and external buffers should provide space for policy maneuvering during adverse geopolitical developments or unfavorable hydrocarbon sector dynamics, including disruption in oil production or exports, said the agency in its latest rating on the UAE.

''Our ratings on the UAE remain supported by the government’s strong fiscal and external positions. Our estimate of the exceptional strength of the government's consolidated net asset position (estimated at 184% of GDP in 2026) provides a significant fiscal external and economic buffer to external shocks.We calculate government liquid assets at about 210% of GDP.''

''The UAE’s general government debt is very low (estimated at about 27% of GDP in 2026) and its consolidated fiscal balance has averaged a surplus of 5.6% over 2021-2025,'' the agency added.

Non-oil sectors, it said, constitute about 75% of GDP and this enhances the economy's ability to withstand the volatility of global markets, in addition to the important role played by government investments and sovereign wealth funds in supporting financial stability.

According to the S&P report, the UAE's banking sector has demonstrated strong resilience and financial soundness over the past few years and is likely to benefit from the performance of the UAE's non-oil economy over the next 12-24 months.

''We expect solid loan growth to continue in 2026-2027. This will be supported by ample liquidity in the banking system amid expected monetary policy easing.''

The S&P affirmed that the stable outlook reflects our view that the UAE's large fiscal and external buffers should provide space for policy maneuvering during adverse geopolitical developments.

WAM