Fitch affirms UAE at AA- with stable outlook, sees 4% surplus

The latest:

Fitch Ratings affirmed the United Arab Emirates at AA- with a stable outlook, pointing to the strength of the sovereign balance sheet and the country’s external asset position. The agency said low government debt and high GDP per capita underpin the score, and projected a consolidated budget surplus worth 4% of GDP in 2026 even as spending rises.

Details:

• The rating: Fitch affirmed the UAE’s long-term sovereign rating at AA- and left the outlook stable, the agency said. It tied the level to the resilience of the federation’s financial position, the strength of its external assets, low government debt levels and a high share of gross domestic product per capita.
• Abu Dhabi’s buffer: The agency projected Abu Dhabi’s sovereign net foreign assets at roughly 180% of total UAE GDP in 2026. Abu Dhabi itself carries an AA rating with a stable outlook from Fitch, and the agency placed that asset ratio among the highest of any rated sovereign.
• Why outlook held: Fitch attributed the stable outlook to the durability of oil export revenues through recent turbulence and to the size of the UAE’s fiscal and external protective margins. Those buffers, according to the agency, absorbed most of the direct negative effects of the conflict on the economy.
• The budget: Fitch expects the UAE’s consolidated budget to stay in surplus at 4% of GDP in 2026. That forecast holds despite an anticipated increase in spending of about 20%, implying revenue strength sufficient to carry a sharply larger outlay without pushing the public finances into deficit.
• Debt position: Low government debt is one of the four pillars Fitch named behind the AA- score, alongside the balance-sheet position, external assets and per-capita output. The agency did not publish a specific debt-to-GDP figure for the federation in its affirmation.
• Oil exposure: Export revenues from oil were singled out by Fitch as a stabilizing factor rather than a vulnerability in this review, with the agency crediting their resilience during the disruption period for limiting the damage to the UAE’s fiscal accounts.
• What was not set: Fitch did not specify the oil price assumptions behind its 2026 projections, nor did it name the components driving the expected 20% rise in spending or the date of its next scheduled review of the UAE sovereign.

Background:

Fitch is one of the three major international credit rating agencies. A sovereign rating in the AA band sits in the second-highest investment-grade category, and a stable outlook signals the agency sees no immediate pressure to move the score in either direction over its review horizon.

Between the lines:

The affirmation rests on a buffer argument rather than a growth argument. Fitch’s projection that Abu Dhabi’s net foreign assets reach roughly 180% of national GDP explains why the agency can forecast a 20% spending increase and still expect a 4% surplus: the asset position, not the expenditure path, is doing the ratings work.

What’s next

Watch whether the 4% surplus forecast survives the actual 2026 budget execution, how oil export revenues hold through the year, and whether Fitch revises the Abu Dhabi AA rating or the UAE outlook at its next review.