16 September 2026
The UAE’s strong sovereign balance sheet continues to underpin the resilience of its credit markets. Earlier this month, S&P Global Ratings affirmed the UAE’s AA sovereign rating with a Stable outlook, highlighting substantial fiscal and external buffers despite heightened regional geopolitical risks.
S&P estimates the UAE’s consolidated government net asset position at around 147% of GDP in 2026, with liquid assets equivalent to approximately 170% of GDP and government debt at just 26% of GDP. The agency expects the consolidated fiscal balance to return to surplus from 2027, averaging 2.3% of GDP over 2026–29.
These buffers are particularly important given the UAE’s exposure to regional geopolitical and energy risks. S&P expects real GDP growth to accelerate to an average 6.2% over 2027–29, supported by higher oil production and continued non-hydrocarbon growth. Following the UAE’s exit from OPEC in May 2026, oil output is forecast to rise from around 3.5mbpd in 2026 to 5.0mbpd by 2029, providing greater flexibility over production and strengthening export earnings and fiscal revenues. At the same time, the growing contribution of non-hydrocarbon activity provides an increasingly important source of diversification and resilience.
Within the federation, Abu Dhabi remains a particularly important source of financial strength. S&P separately affirmed Abu Dhabi at AA, Stable, estimating government net assets at an exceptional 326% of GDP. Fiscal surpluses are expected to average 5.8% of GDP over 2027–29, while oil production is projected to reach 5.0mbpd by 2029.
Importantly, Abu Dhabi’s economy is becoming increasingly diversified. According to the most recent figures, non-oil activity accounted for over 54% of GDP in 2025, with non-oil GDP growing 7.6%. This broadening of the economic base provides an additional source of growth and resilience alongside the emirate’s substantial hydrocarbon resources.
This strength extends to strategically important government-related entities (GREs). Mubadala and TAQA benefit from strong government links, while infrastructure such as the Abu Dhabi Crude Oil Pipeline (ADCOP) provides an alternative export route through Fujairah, reducing reliance on the Strait of Hormuz. S&P also expects a new West-East pipeline to become operational by 2027, further increasing Abu Dhabi’s export capacity through Fujairah.
The combination of high sovereign net assets, substantial liquidity, rising oil capacity and strategically important state-linked issuers provides a meaningful cushion against regional volatility. The UAE and Abu Dhabi are not immune to geopolitical or commodity risks, but their exceptionally strong financial positions provide considerable capacity to absorb shocks while supporting attractive opportunities across sovereign, quasi-sovereign and high-quality corporate credit.
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