Moody's Rating affirmation for Abu Dhabi
Moody’s affirmed the Government of Abu Dhabi’s long‑term local and foreign‑currency issuer ratings at Aa2 on 13 June 2026 and maintained a stable outlook. The agency also affirmed the foreign‑currency senior unsecured debt ratings at Aa2 and the short‑term local and foreign‑currency issuer ratings at P‑1.
The affirmation is underpinned by Abu Dhabi’s exceptionally large financial assets, which exceed the total debt of the central government and the wider public sector. The emirate’s substantial hydrocarbon endowment and a very high per‑capita income of $119,295 in 2025 further support the durability of its net‑creditor position over the long term.
Moody’s notes credit challenges stemming from a high reliance on hydrocarbons and elevated regional geopolitical risks, highlighted by the effective closure of the Strait of Hormuz since early March. The agency’s central scenario assumes a prolonged disruption of trade flows through the Strait but no further major damage to Abu Dhabi’s critical energy infrastructure.
A stable outlook reflects expectations that Abu Dhabi’s credit profile will remain resilient thanks to an established alternative export route via the Habshan‑Fujairah pipeline, which is already transporting 1.8 million barrels per day of crude oil. This capacity enables hydrocarbon exports to remain at approximately 50 % of pre‑conflict levels.
Moody’s projects a real GDP contraction of around 9.5 % in 2026, driven by a 23 % decline in hydrocarbon output and a slight contraction in non‑oil activity amid weaker confidence and tourism. For 2027, the agency expects a sharp rebound with growth of about 17 %, as trade flows through the Strait normalize and oil production gradually increases following the UAE’s departure from OPEC in May 2026.
Oil prices are forecast to average $90–110 per barrel in 2026, and the agency anticipates a small budget surplus despite higher spending.
Moody’s indicates that the rating could be upgraded if Abu Dhabi’s resilience to carbon‑transition scenarios materially improves through greater diversification of its economy and fiscal revenue sources. Conversely, downward pressure could arise from an escalation of the regional conflict that would materially threaten Abu Dhabi’s ability to produce and export oil for a prolonged period.