Fitch affirms Abu Dhabi’s strong rating, with a stable outlook

Abu Dhabi: Hisham Mukhanh

Fitch affirmed Abu Dhabi’s long-term credit rating at “AA” with a stable outlook. This reflects Abu Dhabi’s strong financial and external metrics and high per capita GDP.

In its report, the agency expected that Abu Dhabi would record a fiscal surplus of 1.6 percent of GDP in 2021, supported by oil revenues, and maintain a fiscal surplus for the next year. She also referred to the recovery of the non-oil activity with a growth rate of 3% over the same period, and to the rise in the main growth rates for the next two years.

It is expected, according to Fitch, that the financial and external metrics of the Emirate of Abu Dhabi will remain exceptionally strong in the medium term. And the ratio of total government debt to GDP to stabilize at about 20% between 2021 and 2023, which is among the lowest sovereign debt. As the rise in GDP offset some of the increases in the dollar value of debt.

The report stated that domestic demand in Abu Dhabi will be supported by constant local government spending, the recovery of global demand and tourism, supported by the high vaccination rates in the UAE, and the easing of restrictions related to the Corona virus.

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