UAE Aa2 rating with stable outlook unchanged following Moody’s review

The Ministry of Finance announced that the credit rating agency Moody’s Ratings (Moody’s) has completed a periodic review of the ratings of the United Arab Emirates (UAE) on 30 March 2026.

The review reassessed the appropriateness of the current rating, which remains unchanged at Aa2 with a stable outlook, reflecting continued global confidence in the strength of the UAE’s economy and the sustainability of its fiscal policies, despite ongoing regional geopolitical tensions.

Moody’s clarified that this periodic review does not constitute a credit rating action, but reflects its ongoing assessment of the UAE’s credit profile based on recent developments and applicable methodologies.

The review highlighted several key strengths underpinning the UAE’s creditworthiness, including high per capita income, robust institutional frameworks, and effective policymaking that supports continued economic diversification and competitiveness. It also underscored the federal government’s very low debt burden and strong financial position, supported by substantial fiscal reserves accumulated over years of budget surpluses.

Mohamed Bin Hadi Al Hussaini, Minister of State for Financial Affairs, said that the completion of Moody’s periodic review, with no change to the current rating and a stable outlook, reflects the UAE’s strong institutional framework and its track record of effective governance and policymaking. He noted that the UAE’s fiscal strength is anchored in the federal government’s very low debt burden and its consistent track record of maintaining balanced budgets, reinforcing its resilience amid evolving regional and global challenges.

He added that the stable outlook confirms that the UAE’s sovereign credit profile remains robust, supported by substantial fiscal buffers and prudent financial management, enabling the country to effectively navigate ongoing regional developments.

Al Hussaini further emphasised that the unchanged rating reflects the strength of the UAE’s fiscal fundamentals and the effectiveness of its economic policies, which are built on diversification, fiscal discipline and sustainability.

He added that maintaining strong investment-grade ratings is a testament to the government’s integrated performance and long-term strategic planning, further reinforcing the UAE’s position as a reliable and resilient global economic hub.

He also highlighted the Ministry of Finance’s continued efforts to enhance public financial management, support the growth of productive sectors, and advance the development of the UAE dirham sovereign yield curve, contributing to greater transparency and strengthening the country’s attractiveness in global capital markets.

He noted that this review reinforces confidence in the UAE’s investment environment and underscores its ability to maintain financial and economic stability under various conditions.

The latest review reflects the UAE’s continued progress in expanding non-oil revenues and strengthening its economic diversification agenda. It also recognises the country’s effective risk management framework and its commitment to prudent financial policies, which support economic stability and sustainable growth.

Moody’s indicated that the UAE’s credit profile remains resilient despite regional geopolitical tensions, supported by substantial fiscal reserves and strong institutional backing.

Meanwhile, S&P Global Ratings affirmed on 6 March 2026 the UAE’s sovereign rating at AA/A-1+ for both local and foreign currencies, with a stable outlook, citing the strength of the government’s consolidated financial position and substantial fiscal and external reserves, which provide policy flexibility to navigate geopolitical developments and economic challenges, while reinforcing investor confidence and the UAE’s position as a stable and attractive destination for global capital.

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.

WAM