S&P Holds the UAE at AA With Its Liquid Asset Buffer 40 Points of GDP Lower Than in March
S&P Global Ratings affirmed the United Arab Emirates at AA long term and A-1+ short term, in both foreign and local currency, with a stable outlook, on 4 September. Nothing in the rating moved. The letter, the outlook and the AA+ transfer and convertibility assessment all stand where they were left on 6 March. The number underneath them did move. In March the agency put the government’s liquid assets at about 210 percent of GDP for 2026. On Friday it put the same year at about 170 percent.
The buffer reads 40 points lower and the rating is the same
The consolidated net asset position moved with it, from 184 percent of GDP in the March update to 147 percent on Friday, again both estimates for 2026. The indicators tables carry the same shift, liquid assets from 211.4 percent of GDP to 172.7 and net debt from minus 184.3 percent to minus 146.6.
Neither report explains the change, and a change in the ratio is not necessarily a change in the assets. Every one of these figures is measured against GDP, and neither update states the asset stock in money. The denominator moved hard over the same six months: the agency now assumes Brent at 110 dollars for the remainder of 2026 and records production rising from 3.4 million barrels a day in February to about 3.8 million in July. A larger nominal economy shrinks the ratio on its own, with the assets untouched. Whether the numerator fell, the denominator rose, or both, is not recoverable from what is published, and this report does not guess.
What is recoverable is that the rating did not move with it. Both updates score zero on the supplemental adjustments and flexibility line, and the sentence attached to that line is word for word identical in the two documents apart from the figure itself: about 200 percent of GDP in March, about 170 percent in September.
The largest surplus is pencilled in at the lowest oil price
The agency publishes three fiscal figures that do not sit together at first reading: a deficit of 1.3 percent of GDP in 2026, surpluses averaging 3.5 percent across 2027 to 2029, and a consolidated balance averaging a 2.3 percent surplus across 2026 to 2029. They are one series over three windows, and the annual column reconciles to both averages on our calculation.
| Year | Brent assumption, dollars | Balance, percent of GDP |
|---|---|---|
| 2026 | 110 | Minus 1.3 |
| 2027 | 80 | 3.1 |
| 2028 | 65 | 3.2 |
| 2029 | 65 | 4.2 |
Both series are the agency’s own, from the research update of 4 September 2026. The Brent figure for 2026 applies to the remainder of the year rather than the full twelve months, so it is not a full year average and any percentage change measured from it inherits that limitation. The balance improves 5.5 points between the first row and the last on our calculation.
The stated bridge is production. Output was 3.4 million barrels a day in February 2026, reached about 3.8 million in July, and is put at about 3.5 million for 2026 as a whole, rising to 4.0 million by 2027 and 5.0 million by 2029. That is a 42.9 percent increase on the 2026 annual figure on our calculation, and the agency says plainly that higher oil production will drive the surpluses of 2027 to 2029.
The two assumptions move in opposite directions across those years, volume up 42.9 percent and price down about 41 percent on the partial year base above, and the release publishes no decomposition of the swing. Oil supplies 45 to 50 percent of general government revenue, so how much of the 5.5 points comes from volume, how much from the non-oil recovery and how much from the spending path is not recoverable from what is published. The gap sits on the years furthest out, where the price assumption is lowest and the volume assumption highest.
The country left OPEC and the OPEC+ arrangement on 1 May 2026, and the agency records a pre-exit quota of 3.41 million barrels a day against estimated capacity of 4.85 million, so the quota sat about 29.7 percent below capacity on our calculation. ADNOC targets 5 million barrels of capacity by 2027.
The balance sheet remains the rating’s principal defence
| Measure, percent of GDP, 2026 | Value |
|---|---|
| Liquid government assets | 170 |
| Consolidated net government assets | 147 |
| General government debt | 26 |
| Government related entity debt | 21 |
| Federal government debt | 3 |
The agency’s own figures as stated in the text of the 4 September 2026 research update; its indicators table carries 172.7 and 146.6 for the first two rows. Liquid assets include funds managed by the Abu Dhabi Investment Authority and the Emirates Investment Authority, government deposits and minority listed shareholdings held by individual emirates. The government related entity figure is the agency’s estimate made, in its own words, absent adequate disclosures; it assesses contingent liabilities from the state owned sector separately and qualitatively, as limited. Federal debt was 67 billion dirhams at 29 July 2026.
Even on the lower reading, liquid assets cover general government debt about 6.5 times on our calculation, which is why the arithmetic of the oil forecast does not decide the rating.
The debt is also barely federal. Federal borrowing is about 12 percent of the consolidated stock on our calculation, because a decree requires the federal budget to balance every year. About 70 percent of the stock was issued by Abu Dhabi and Dubai and about 18 percent by Sharjah. The government related entity estimate moved between the two updates as well, from about 24 percent of GDP in March to about 21 percent on Friday.
The year the forecast is recovering from
Regional security disruption cut through the non-oil economy this year, and the agency names the affected industries as tourism, manufacturing, trade, construction and real estate, together about 45 percent of real GDP. Non-oil sectors are about 75 percent of GDP.
| Indicator, 2026 | Reading |
|---|---|
| Jebel Ali container throughput, first half | Down about 60 percent to 3.1 million twenty foot equivalent units |
| Dubai airport passengers, first half | Down 31 percent to 31.5 million |
| Dubai airport cargo, first half | Down 28.7 percent |
| Hotel occupancy, first half | 58 percent against 80 percent a year earlier |
| Dubai property transactions, monthly average | 13,095 in March to July against 17,198 in January and February |
All figures as carried in the 4 September 2026 research update, which attributes the occupancy reading to the property services firm JLL and the transaction counts to the Dubai Land Department. The Jebel Ali fall is attributed to disruptions in the Strait of Hormuz. The airport and occupancy rows are stated by the agency as year on year comparisons; the property row compares two periods of 2026 and is a fall of 23.9 percent on our calculation.
The agency says the container collapse may have triggered a systemic shock to the trade sector that is not fully visible yet, and notes that several airlines have suspended Middle East routes until the third quarter of 2026, so it expects a slow and staggered recovery late in the year. Against that, growth is put at 2.4 percent in 2026 and an average of 6.2 percent across 2027 to 2029, though 2027 alone at 8.0 percent lifts that three year average about 0.9 points above the mean of the two years that follow it, on our calculation.
What would move the rating
A downgrade would need prolonged security risks or renewed escalation to reach infrastructure, oil exports or investor confidence beyond what the agency expects, eroding the asset buffers. An upgrade needs two things over the medium term: a lasting reduction in regional risk, and significant improvement in the availability and timeliness of data disclosure across the federation and the individual emirates, particularly on fiscal assets, contingent liabilities and external accounts. Measures to make monetary policy more effective, such as deeper domestic capital markets, are named as a further positive.
The disclosure condition is the notable one. An agency that has to estimate government related entity debt, in its own words, absent adequate disclosures is naming a reporting constraint rather than a financial one, and it has put that constraint into the upgrade path alongside geopolitics.
Why it matters: The sovereign rating is the credit benchmark for federal and emirate issuers and for the country’s government related entities, and it held at AA through a year in which ports, airports, hotels and property transactions all recorded double digit declines. A rating that survives that, while the buffer behind it reads a fifth lower against GDP than it did in March, is a statement that what remains is still far more than the letter requires.
Outlook: The forecast rests on two things that are not yet settled. Production has to reach 5 million barrels a day by 2029 from 3.8 million in July, and trade and tourism have to recover from a shock the agency itself calls not fully visible yet. The next sovereign review will test both. The evidence arriving before it is monthly and operational: port throughput, airport traffic and property transactions.
Sources: S&P Global Ratings.
