S&P Global Ratings confirmed the United Arab Emirates' sovereign credit ratings at AA for long-term and A-1+ for short-term foreign and local currency obligations, keeping the outlook stable. The agency also left its transfer and convertibility assessment at AA+.
S&P pointed to the UAE's unusually strong fiscal and external positions as the core support for the ratings. The consolidated net asset position of government entities is estimated at 147% of GDP in 2026, while general government debt is modest at about 26% of GDP in 2026. S&P's projections show the consolidated fiscal balance averaging a surplus of 2.3% of GDP over 2026-2029.
Liquid assets are substantial, calculated at roughly 170% of GDP. Those holdings include assets managed by major sovereign wealth vehicles such as the Abu Dhabi Investment Authority and Emirates Investment Authority. These buffers underpin the credit assessment by providing sizable cushions against shocks to revenues or capital flows.
On the growth side, S&P expects real GDP to expand by 2.4% in 2026 and accelerate to an average 6.2% annual growth over 2027-2029. A key driver of that improvement is the UAE's exit from the Organization of the Petroleum Exporting Countries and the OPEC+ arrangement on May 1, 2026, which freed the country from production quota constraints.
Reported oil production rose to about 3.8 million barrels per day in July 2026. S&P's baseline sees average annual oil output of about 3.5 million barrels per day in 2026, increasing to 5.0 million barrels per day by 2029, up from 3.4 million barrels per day in February 2026.
While hydrocarbon-related metrics are favourable, S&P highlighted the impact of the Middle East war on non-hydrocarbon activity, which comprises around 75% of the UAE's economy. Tourism and travel metrics showed pronounced weakness in the first half of 2026. According to JLL, hotel occupancy fell to 58% in the first half of 2026 from 80% in the same period of 2025. Passenger traffic at Dubai airport declined sharply to 31.5 million in the first six months of 2026, down 31% year on year.
Trade flows were also disrupted. Container throughput at Jebel Ali port dropped by about 60% in the first half of 2026 to 3.1 million twenty-foot equivalent units. Those declines illustrate the near-term stress on services, trade logistics, and travel-related sectors even as sovereign fiscal and external positions remain robust.
Fiscal projections from S&P show a general government deficit of 1.3% of GDP in 2026, followed by surpluses averaging 3.5% of GDP in 2027-2029. These estimates incorporate specific Brent oil price assumptions: $110 per barrel for the remainder of 2026, $80 per barrel in 2027, and $65 per barrel for 2028-2029. On the external side, S&P projects the current account surplus to moderate to an average of 6.7% of GDP in 2026 and to recover to roughly 13% of GDP over 2027-2029.
The affirmation underscores the UAE's strong balance sheet metrics and sizeable liquidity as central to its sovereign creditworthiness, while also flagging the near-term headwinds to the non-hydrocarbon economy arising from regional conflict and softer travel and trade activity.