Fitch Affirms Abu Dhabi’s ‘AA’ Rating with Stable Outlook Amid Strong Fiscal Position

UAE, 28 June, 2024 :  Fitch Ratings has affirmed Abu Dhabi’s rating at ‘AA’ with a stable outlook, citing the emirate’s strong fiscal position and high GDP per capita.

Abu Dhabi’s government debt, at 15% of projected 2024 GDP, remains among the lowest of Fitch-rated sovereigns. Sovereign net foreign assets (SNFA) reached 225% of GDP at the end of 2023 ($672 billion), significantly up from 2022 due to strong global stock markets.

Fitch forecasts fiscal surpluses of 5.4% of GDP in 2024 and 3.6% in 2025, following an estimated 11% of GDP in 2023. Oil production is expected to rise to 3.375 million barrels per day by December 2025, partially offsetting projected lower Brent oil prices of $70 per barrel in 2025 and $65 in 2026.

Spending is projected to stay within 260 billion to 300 billion UAE dirhams ($68 billion to $81.67 billion), with most capital spending by state-owned enterprises.

Fitch noted constraints from high dependence on hydrocarbons, a relatively weak but improving economic policy framework, and low governance indicators compared to peers.

Source : www.zawya.com