{"id":93285,"date":"2024-06-27T00:00:00","date_gmt":"2024-06-27T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/abu-dhabis-fcy-issuer-default-rating-affirmed-at-aa\/"},"modified":"2024-06-27T00:00:00","modified_gmt":"2024-06-27T00:00:00","slug":"abu-dhabis-fcy-issuer-default-rating-affirmed-at-aa","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2024\/06\/27\/abu-dhabis-fcy-issuer-default-rating-affirmed-at-aa\/","title":{"rendered":"Abu Dhabi\u2019s FCY issuer default rating affirmed at AA"},"content":{"rendered":"

Fitch Ratings affirmed Abu Dhabi's long-term foreign-currency issuer default rating at AA<\/strong> with a stable outlook<\/strong>, it said in a statement<\/a>. The rating affirmation \u201creflects Abu Dhabi's high GDP per capita and strong fiscal and external metrics,\u201d the ratings agency said.<\/p>\n

The fiscal forecast:<\/strong> Fitch expects to see the emirate maintaining a fiscal surplus this year and next, although the surplus is expected to narrow from an estimated 11% in 2023. Abu Dhabi is expected to have a fiscal surplus of 5.4% of GDP in 2024 and 3.6% in 2025, Fitch says. The surplus figure without accounting for investment income from the Abu Dhabi Investment Authority comes in at 1.8% of GDP in 2024 and \u201cclose to balance\u201d next year. <\/p>\n

What\u2019s constraining the rating:<\/strong> Abu Dhabi\u2019s high reliance on hydrocarbons and a \u201crelatively weak but improving economic policy framework and low governance indicators compared with peers\u201d as the primary factors holding it back from a rating upgrade. Hydrocarbon revenue accounted for an estimated 76% of annual fiscal revenue, on average, from 2019 through to 2023, Fitch says. \u201cAu Dhabi's ability to diversify revenue sources remains constrained by the GCC's low tax environment and policy aimed at keeping conditions attractive for FDI and supporting economic diversification.\u201d<\/p>\n

What would have a positive impact on the rating:<\/strong> Structural economic factors, including reducing its reliance on oil and hydrocarbon revenue, would support a higher rating for Abu Dhabi, Fitch said. \u201cA strengthening in governance and a reduction in geopolitical risk while maintaining strong fiscal and external balance sheets\u201d could also support a rating upgrade.<\/p>\n","protected":false},"excerpt":{"rendered":"

The ratings agency expects a fiscal surplus for the next two years, albeit at narrower rates<\/p>\n","protected":false},"author":1,"featured_media":93286,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1556],"tags":[1360,1391,19],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-93285","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-abu-dhabi","tag-debt","tag-economy","wpautop","entry"],"acf":{"mongo_id":"17e54455-6a30-42ce-9bae-ea7318d71cac","order":"4","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/1\/1891.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Abu Dhabi\u2019s FCY issuer default rating affirmed at AA","related_issue":[93278],"teaser":"The ratings agency expects a fiscal surplus for the next two years, albeit at narrower rates","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/6\/.1c69bc28-4978-4e88-a4a2-a8f117542035.mp3"},"yoast_head":"\nAbu Dhabi\u2019s FCY issuer default rating affirmed at AA - 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