S&P Global Ratings has affirmed the UAE’s sovereign credit ratings at AA/A-1+ with a stable outlook, citing the country’s strong fiscal reserves, diversified economic base, and policy flexibility despite rising regional tensions.
The agency pointed to the UAE’s consolidated net assets, projected at around 184% of GDP in 2026, and relatively low general government debt of approximately 27% of GDP as important safeguards against potential economic shocks.
S&P said that “our baseline forecasts carry a significant amount of uncertainty” as tensions escalate between Iran, Israel, and the United States, including risks that key infrastructure could be targeted.
“We also believe the authorities will deploy their substantial policy flexibility to counteract the effects of volatility stemming from geopolitical tensions in the Gulf region on economic growth, government revenue, and its external accounts.
“We believe this flexibility will enable the UAE to withstand periods of low oil prices and, more importantly, the temporary disruption of oil production and export routes,” the report adds.
The UAE is navigating a tense geopolitical landscape as the conflict involving Iran, Israel, and the US escalates. Concerns over security in the Strait of Hormuz have sharply reduced vessel traffic, increasing volatility in oil markets and raising investor anxiety.
Furthermore, the ratings agency also highlighted the UAE’s diversified economic structure as a key stabilising factor, noting that non-oil sectors now account for about 75% of the country’s GDP, Arab News reports.
Key infrastructure projects, such as the Abu Dhabi Crude Oil Pipeline to Fujairah, allow the UAE to bypass the Strait of Hormuz and protect its oil export flows, while ADNOC’s investments in overseas storage capacity help further reduce supply risks.
Despite ongoing geopolitical pressures, S&P expects sectors including financial services, trade, and tourism to remain relatively resilient. The agency projects UAE economic growth will slow to 2.2% in 2026, from 5% in 2025, reflecting possible impacts from expatriate departures, weaker tourism receipts, and softer demand in the real estate market.
However, S&P cautioned that “we now expect weaker economic and external performance due to increased intensity, scope, and potential duration of conflict in the Middle East.”
The UAE has consistently held strong and stable sovereign credit ratings, reflecting the resilience and diversification of its economy along with sound fiscal management.
Even during periods of regional tension or volatility in oil markets, ratings agencies have largely maintained their positive assessments, highlighting the country’s policy flexibility, solid public finances, and attractiveness to international investors.