Fitch UAE rating stays AA-; real GDP to grow 0.5% in 2026

The Fitch UAE rating was affirmed at ‘AA-’ with a stable outlook on Friday, with the agency now forecasting real GDP growth of 0.5% in 2026 despite the impact of the Iran war.

Fitch Ratings affirmed the UAE’s long-term foreign-currency Issuer Default Rating at ‘AA-’, saying the sovereign credit rating reflects the country’s low consolidated government debt, strong net external asset position and high GDP per capita, The National reported on Saturday. AA- is the fourth-highest grade on Fitch’s scale, three notches below its top AAA rating, and keeps the country firmly in investment-grade territory.

UAE GDP growth in 2026 is expected to be uneven. Fitch estimates that non-oil GDP will contract by 1.5% this year, while hydrocarbon GDP is forecast to rise by about 7% in 2026 and by about 26% in 2027, as oil production is no longer limited by OPEC+ quotas following the UAE’s exit from OPEC and OPEC+, which took effect on 1 May.

Fitch UAE rating: why the outlook is stable

Fitch said the stable outlook reflects the demonstrated resilience of oil export revenues during the war, which has largely offset its immediate negative impact, together with abundant fiscal and external buffers. The agency also expects individual emirates, rather than the federal government, to bear the cost of the conflict.

The rating draws support from Abu Dhabi’s sovereign net foreign assets, which Fitch puts at 180% of UAE GDP in 2026, among the highest of any sovereign it rates. Abu Dhabi holds a separate AA rating from Fitch, which was affirmed in May.

Abu Dhabi’s export revenues in 2026 are expected to come in above Fitch’s pre-war forecasts, helped by elevated crude prices and higher export volumes through the pipeline to Fujairah as well as the Strait of Hormuz. Fitch said crude makes up the bulk of exports, and that the emirate’s oil export infrastructure is less exposed to long-term damage than concentrated downstream or liquefied natural gas plants.

Dubai recovery and the non-oil outlook

Fitch expects all the emirates to put recovery programmes in place, but said “non-oil trend growth will be below pre-war levels” over its forecast period. Dubai’s real GDP is expected to remain below its 2025 level next year as the emirate continues to recover from the effects of the war.

Government data published last month showed Dubai’s real GDP reached AED473 billion (about $128.8 billion) in the first half of 2026, down 2.3% from a year earlier. Growth in financial services, healthcare and construction helped offset weakness in transport, trade and real estate.

At the national level, UAE GDP grew 0.4% year on year to AED961.9 billion in the first half of 2026, according to the Federal Competitiveness and Statistics Centre. Non-oil GDP grew 1.8% over the period, lifting the non-oil share of the economy to 79.2% from 78.1% a year earlier.

Foreign trade has also held up. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, said last week that the UAE’s non-oil foreign trade came close to a record AED3 trillion in the first nine months of the year despite the regional headwinds.

Official reaction and what comes next

Dr Anwar Gargash, diplomatic adviser to the UAE President, welcomed the decision in a post on X, Gulf News reported. He said the affirmation carried particular significance given the regional crisis, and that it reinforced international confidence in the UAE economy and showed the success of the country’s long-term fiscal and economic policies.

For investors, the Fitch UAE rating of AA- with a stable outlook supports continued access to international debt markets for the federal government and for government-related issuers that borrow against the sovereign’s standing. A stable outlook also indicates that Fitch does not currently expect to change the rating in the near term.

Fitch last affirmed the UAE at AA- in May 2026, when it projected a 4.8% contraction in real GDP for the year, including a 3.2% fall in non-oil output and a drop of about 10% in hydrocarbon GDP. The latest forecast reflects a sharp turnaround in the oil sector, with hydrocarbon GDP now expected to rise by about 7% this year.

Also Read: Qatar GDP forecast: S&P sees 15% rebound in 2027

The agency’s view will next be tested by how quickly Dubai and the other emirates can restore pre-war levels of non-oil activity, and by the pace at which oil production rises now that the UAE sets its own output policy outside OPEC+.