Capital Intelligence affirmed the UAE’s long-term foreign and local currency ratings at AA- with a stable outlook, alongside an A1+ short-term rating, according to a statement (pdf). This comes as the UAE’s liquidity reserves and diversification efforts continue to insulate its economy from regional volatility, including escalations in Yemen and ongoing tensions between the US and Iran.

The international liquidity shield: Official reserves are projected to have reached USD 280 bn by end-2025, and to cover 215.4% of all external debt maturing in 2026. This signals to global markets that the UAE’s solvency remains robust even if Red Sea tensions or broader regional frictions escalate further, the report indicates.

The rating is constrained by the UAE’s relative dependence on hydrocarbon revenues (accounting for around 40% of government revenueS), along with budget rigidities and high geopolitical risk, CI said.

Why it matters: This liquidity cushion is the foundation for a projected 5.1% growth spurt in 2026. CI’s outlook assumes that Opec+ production cuts will begin a “gradual phase-out” in 1Q 2026-27, allowing the UAE to monetize its expanded production capacity. While oil prices are conservatively forecasted at USD 60 / bbl for 2026-27, a budget surplus of 4.7% of GDP is expected — with growth in non-hydrocarbon sectors and increased output largely balancing the impact of a weaker price environment.

How this compares to other ratings: Fitch Ratings previously gave UAE banks a stable outlook, reflecting the strength of the sovereign rating at AA-. While Moody’s adjusted its outlook to “stable” as a precautionary measure, S&P Global affirmed strong credit ratings, noting that risks associated with consumer lending — which grew by 13.6% annually to reach AED 540 bn — remain manageable.

The outlook: An upgrade remains on the table if the UAE reduces its reliance on hydrocarbons, improves data transparency regarding sovereign wealth fund assets, and sees a durable decline in regional geopolitical tensions. Conversely, a downgrade could be triggered by a prolonged disruption to oil flows due to regional conflict, a sharp and sustained drop in oil prices that increases refinancing risks, or a significant deterioration in the fiscal balance sheet that erodes the country’s current net creditor position.

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