Fitch Forecasts Continued Growth in Abu Dhabi’s Non-Oil Economy in 2026.
Fitch Ratings, one of the world’s leading international credit rating agencies, has reaffirmed Abu Dhabi’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘AA’, maintaining its Stable Outlook.
The agency cited the Emirate’s strong fiscal position, high GDP per capita and substantial sovereign foreign assets, alongside relatively low government debt compared with other similarly rated economies.
Fitch said the Stable Outlook reflects the resilience of Abu Dhabi’s oil export revenues amid the US-Iran conflict, which has helped the Emirate maintain and further strengthen its external and fiscal reserves.
Fiscal surpluses expected to exceed spending
Fitch expects increased revenues from higher oil production to outpace growth in government expenditure. The agency forecasts a budget surplus equivalent to 7.1% of GDP in 2026, including investment income generated by the Abu Dhabi Investment Authority (ADIA).
The fiscal surplus is projected to expand further in 2027, supported by higher hydrocarbon production, before narrowing in 2028 as oil prices ease.
Fitch’s baseline projections assume Brent crude will average $70 per barrel in 2027 and $60 per barrel in 2028.
Strong sovereign assets and manageable debt levels
Fitch highlighted Abu Dhabi’s exceptionally strong sovereign balance sheet, estimating that net sovereign foreign assets will reach approximately 300% of GDP by the end of 2025. This compares with an average of 45.1% among sovereigns carrying an ‘AA’ rating.
The agency expects fiscal surpluses to support government-related entities (GREs) involved in long-term development projects while also contributing to higher domestic bank deposits.
Government debt stood at approximately 19.3% of GDP at the end of 2025, significantly below the ‘AA’-rated sovereign median of 46.5%.
Fitch expects government debt to remain broadly around these levels, with greater emphasis on issuing debt in local currency to support the development of Abu Dhabi’s domestic capital markets.
Non-oil economy set for continued expansion
Fitch also expects Abu Dhabi’s non-oil economy to maintain steady growth throughout 2026, driven by elevated capital expenditure, countercyclical government support measures and resilient consumer spending.
Meanwhile, increased hydrocarbon production is expected to boost real GDP growth to 15.1% in 2027, with infrastructure investments financed by government-related entities providing further support to economic expansion.
The rating affirmation underscores Fitch’s assessment of Abu Dhabi’s strong fiscal buffers, substantial sovereign assets and capacity to sustain economic growth amid regional uncertainty.
Fitch also highlighted the resilience of Abu Dhabi’s banking sector amid regional geopolitical tensions. According to the agency, banks in the Emirate have maintained strong financial positions, supported by healthy liquidity levels, solid capital buffers and robust financial fundamentals.
About Fitch Ratings
Fitch Ratings is one of the world’s leading international credit rating agencies, specialising in evaluating the financial strength and creditworthiness of governments, sovereign states, financial institutions and corporations.
It is recognised as one of the three major global credit rating agencies, alongside:
- Fitch Ratings
- Moody’s Ratings
- S&P Global Ratings
What does Fitch’s AA rating for Abu Dhabi mean?
Fitch’s decision to maintain Abu Dhabi’s ‘AA’ rating with a Stable Outlook carries two key implications:
- AA Rating: This indicates that Abu Dhabi has a very strong capacity to meet its financial commitments and repay its debts. It reflects the Emirate’s strong financial position, substantial assets and high level of creditworthiness.
- Stable Outlook: This signals that Fitch expects Abu Dhabi’s credit profile to remain broadly unchanged in the foreseeable future, with no significant deterioration or improvement anticipated.
What does the rating indicate?
The reaffirmation of Abu Dhabi’s ‘AA’ credit rating with a Stable Outlook highlights the Emirate’s sound fiscal management, substantial financial reserves and flexibility in responding to economic challenges.
It also reflects Abu Dhabi’s ability to meet its debt obligations while sustaining long-term economic development.
The rating further reinforces international confidence in the Emirate’s financial strength, economic resilience and ability to navigate regional and global uncertainties.
