Fitch Affirms Abu Dhabi at AA With Stable Outlook as Oil Revenue Holds Up Through War

The agency expects a 2026 budget surplus of 7.1 per cent of GDP and puts the emirate's net sovereign foreign assets at about 300 per cent of GDP, far above its peers.

By Nakoda News Desk

1 day ago·2 min read

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Fitch Ratings has affirmed Abu Dhabi's long-term foreign-currency issuer default rating at 'AA' with a stable outlook, Gulf News reported on Wednesday. The agency pointed to the emirate's strong fiscal metrics, high GDP per capita, large net sovereign foreign assets and low government debt compared with similarly rated sovereigns.

Fitch linked the stable outlook to how well Abu Dhabi's oil export revenue has held up during the US-Iran war, which has allowed the emirate to keep building its external and fiscal reserves, according to the report.

Surpluses Expected To Widen

Fitch expects revenue from higher oil production to grow faster than spending. It projects a budget surplus of 7.1 per cent of GDP in 2026, including investment income from the Abu Dhabi Investment Authority. It sees the surplus widening in 2027 as hydrocarbon output rises, then narrowing in 2028 as prices fall. Its baseline assumes Brent crude averages $70 a barrel in 2027 and $60 a barrel in 2028.

Fitch called the emirate's sovereign balance sheet exceptionally strong. It estimates net sovereign foreign assets at about 300 per cent of GDP at the end of 2025, against an average of 45.1 per cent for 'AA'-rated peers. Government debt was about 19.3 per cent of GDP at the end of 2025, compared with a 'AA' median of 46.5 per cent. Fitch expects debt to stay around these levels, with more borrowing in local currency to help develop domestic capital markets.

Fitch expects surpluses to go towards government-related entities carrying out long-term development projects, and towards raising deposits in local banks.

Growth Outlook

Fitch expects non-oil activity to keep growing through 2026, helped by high capital spending, countercyclical support measures and strong consumer spending. It forecasts real GDP growth accelerating to 15.1 per cent in 2027 on higher hydrocarbon output, supported by infrastructure projects funded by government-related entities.

The agency also said Abu Dhabi's banks had proved resilient during the geopolitical tensions, with ample liquidity and solid capital buffers.

The affirmation comes as the war and attacks on shipping near the Strait of Hormuz continue to weigh on the region's energy trade. For investors and companies in Abu Dhabi, the rating backs the emirate's ability to keep funding its large state-backed investment programme, including its spending on AI and digital infrastructure through government-related entities, while also expanding its local-currency debt market.