Moody's affirmed the United Arab Emirates' long‑term local and foreign‑currency issuer ratings at Aa2 with a stable outlook on Friday. The New York‑based agency said the rating reflects the country's high per‑capita income, effective policymaking and a strong shock‑absorption capacity.
Moody's affirms Aa2 rating for UAE
The Aa2 rating sits two notches below Moody's top grade and signals an investment‑grade status that eases access to capital markets. Analysts highlighted the federal government's very low debt burden as a key factor behind the rating decision.
Moody's also noted that the UAE's diversified economy and ongoing diversification initiatives underpin its credit strengths. The agency pointed to the nation's ability to absorb external shocks, especially in the context of the US‑Iran war, as a buffer against regional volatility.
Regional tensions and economic outlook
While the rating remains stable, Moody's warned that elevated regional geopolitical risks have led to an effective closure of the Strait of Hormuz since early March. "These credit strengths are balanced by elevated regional geopolitical risks evidenced by the ongoing conflict in the Middle East that has led to an effective closure of the Strait of Hormuz since early March," analysts at Moody's wrote.— Moody's analysts
The agency projects that higher crude prices, forecast to average between $90 and $110 in 2026, will offset reduced oil export volumes. Nevertheless, real GDP is expected to decline by about 7 percent this year, with hydrocarbon production down 23 percent and the non‑hydrocarbon sector falling 4 percent.
Abu Dhabi's credit standing and diversification
Moody's also maintained Abu Dhabi's Aa2 long‑term rating, citing "exceptionally large financial assets" estimated at roughly 300 percent of GDP in 2025. The rating benefits from the Habshan‑Fujairah pipeline—an alternative route that bypasses the Strait of Hormuz—helping to keep the capital's credit profile resilient.
With the pipeline in place, Moody's expects government revenue to exceed pre‑conflict expectations, providing flexibility for spending on economic support measures, subsidies and defence. Real GDP for the emirate is projected to fall about 9.5 percent in 2026, but a sharp rebound of roughly 17 percent is forecast for 2027 as trade flows normalise and oil production gradually rises. Ongoing diversification and infrastructure projects are set to keep Abu Dhabi's non‑oil economy relatively resilient.
Frequently asked questions
What is the current credit rating of the UAE according to Moody's?
Moody's has affirmed the UAE's long‑term local and foreign‑currency issuer ratings at Aa2 with a stable outlook.
Why did Moody's keep the UAE rating at Aa2?
Moody's cited the country's high per‑capita income, very low debt burden, effective policymaking and strong shock‑absorption capacity as reasons for maintaining the Aa2 rating.
What risks could affect the UAE's credit rating?
Moody's warned that elevated regional geopolitical risks, such as the ongoing Middle East conflict and the effective closure of the Strait of Hormuz, could impact the UAE's credit standing.
How does the UAE's debt level influence its credit rating?
The agency highlighted the UAE's very low debt burden as a key factor that supports its investment‑grade Aa2 rating.
What does the Aa2 rating mean for the UAE?
An Aa2 rating sits two notches below Moody's top grade and signals an investment‑grade status that eases access to capital markets.
