Fitch Ratings has affirmed Abu Dhabi’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at “AA” with a Stable Outlook, highlighting the emirate’s robust fiscal position and strong external buffers. The rating reflects Abu Dhabi’s high GDP per capita and solid fiscal and external performance, placing it two notches below the highest sovereign rating of “AAA.”
The “AA” rating indicates a very strong ability to meet financial obligations in foreign currency, with the Stable Outlook suggesting limited likelihood of rating changes in the near term. Fitch noted that Abu Dhabi’s export revenues are expected to remain close to pre-war projections, as increased oil prices and shipments through Fujairah compensate for reduced volumes passing through the Strait of Hormuz. The bulk of the emirate’s exports consist of crude oil, whose export infrastructure is seen as less vulnerable to long-term damage compared to more concentrated downstream or liquefied natural gas facilities.
Despite recent geopolitical disruptions, Fitch expects the Abu Dhabi government to increase financial support for key government-related entities (GREs), especially those impacted by higher costs. This support aims to maintain these entities' financial stability amid ongoing challenges. While fiscal pressures persist, Abu Dhabi's overall fiscal position remains solid. Fitch projects a general government surplus of 3.0% of GDP in 2026, including income from the Abu Dhabi Investment Authority (ADIA). Excluding ADIA’s investment income, a deficit of 2.2% is anticipated, marking the first such deficit since 2020. The introduction of corporate income tax, with revenues derived from 2023-2024 corporate performance, is also expected to bolster government revenues.
Government debt stood at 19.5% of GDP at the end of 2025, significantly lower than the peer median of 50.3%, and is forecast to increase to 25.3% in 2026 due to additional borrowing ahead of stabilizing thereafter. Fitch anticipates that Abu Dhabi will issue more local currency debt to support its domestic debt market and may refinance upcoming external debt maturities.
Abu Dhabi’s balance sheet remains exceptionally strong, with sovereign net foreign assets estimated at 291% of GDP at the end of 2025, substantially surpassing the ‘AA’ median of 45.4%. While the emirate carries relatively high contingent liabilities because of its financial backing role for the UAE and reliance on GREs to finance long-term projects, Fitch considers these risks manageable given robust fiscal buffers and the generally profitable operations of these entities.
The ratings agency also underscored the resilience of Abu Dhabi’s banking sector. Major banks, including First Abu Dhabi Bank and Abu Dhabi Commercial Bank, maintain liquidity ratios above 30% relative to deposits, providing substantial buffers against potential shocks. Furthermore, these banks have limited exposure to corporate real estate concentrations, ensuring ample liquidity in stress scenarios.
Fitch confirmed that Abu Dhabi’s Country Ceiling remains aligned with that of the United Arab Emirates at “AA+,” reflecting a low likelihood of transfer and convertibility restrictions for private-sector entities within the jurisdiction.