Credit rating agencies have reaffirmed the UAE’s stable economic outlook with Moody’s Investor Services reaffirming Aa2 rating with Stable Outlook on April 3, 2026 – five weeks since the breakout of the war against Iran and the regional uncertainty.
Moody’s completed a periodic review of the ratings for the UAE on March 30, 2026, which reaffirmed its previous rating, reflecting continued global confidence in the country’s economy and sustainability of its fiscal policies, despite the ongoing regional geopolitical tensions.
Moody’s clarified that “this periodic review does not constitute a credit rating action, but reflects its ongoing assessment of the UAE’s credit profile based on recent developments and applicable methodologies,” in a statement.
“The review highlighted several key strengths underpinning the UAE’s creditworthiness, including high per capita income, robust institutional frameworks, and effective policymaking that supports continued economic diversification and competitiveness. It also underscored the federal government’s very low debt burden and strong financial position, supported by substantial fiscal reserves accumulated over years of budget surpluses,” a statement said.
Mohamed bin Hadi Al Hussaini, UAE Minister of State for Financial Affairs, said that the completion of Moody’s periodic review, with no change to the current rating and a stable outlook, reflects the UAE’s strong institutional framework and its track record of effective governance and policymaking.
“The stable outlook confirms that the UAE’s sovereign credit profile remains robust, supported by substantial fiscal buffers and prudent financial management, enabling the country to effectively navigate ongoing regional developments. It also reflects the strength of the UAE’s fiscal fundamentals and the effectiveness of its economic policies, which are built on diversification, fiscal discipline and sustainability.
“Maintaining strong investment-grade ratings is a testament to the government’s integrated performance and long-term strategic planning, further reinforcing the UAE’s position as a reliable and resilient global economic hub. This review reinforces confidence in the UAE’s investment environment and underscores its ability to maintain financial and economic stability under various conditions.”
Habiba Al Marashi, Chairperson of Emirates Environmental Group, said, “These past weeks has been a sobering reminder to our nation and to the wider Middle East of how fragile global stability can be. Geopolitical unrest in our region has once again underscored the importance of resilience, unity and responsible leadership.
“In times of uncertainty, countries are tested not only by the challenges they face, but by the values they uphold. The UAE continues to stand as a model of stability, foresight and measured response — a nation that remains united and focused on progress, sustainability and long-term prosperity despite external turbulence.
“What is particularly remarkable is how, in moments such as these, every sector of our society comes together. Government entities, private sector organisations, civil societies and communities respond with a shared sense of purpose and responsibility. There is a collective resilience that defines the UAE — one that is not only institutional, but deeply human.”
However, the current regional conflict could hamper the economy, especially real estate, tourism, aviation, trade and logistics sectors – if it lingers for a prolonged period, rating agencies and others cautions.
“Weaker economic activity, reduced tourism and slower population growth would put pressure on residential and commercial real estate markets,” Fitch Ratings said in a report on April 2, 2026.
Before the conflict started, Fitch forecast real estate prices to undergo a moderate correction of up to 15 per cent over 2H25–2026 following several years of strong growth.
“However, conflict spillovers will add further pressure, resulting in a larger correction than forecast,” Fitch Ratings said.
Corporate real estate accounted for 13 per cent of UAE banks’ gross loans at the end of 2025, down from 20 percent at end-2021, and this sector is likely to be the main source of new Stage 3 loans if the conflict is prolonged. Some banks still have high concentrations in their loan books. Their asset-quality metrics could weaken, adding profitability pressures, if the real estate price correction exceeds our pre-conflict expectations.
On March 6, 2026, S&P Global Ratings affirmed its ‘AA/A-1+’ long- and short-term foreign and local currency sovereign credit ratings on the UAE. The outlook is stable. The transfer and convertibility assessment is ‘AA+’.
“The stable outlook reflects our view that the UAE’s large fiscal and external buffers should provide space for policy maneuvering during adverse geopolitical developments or unfavorable hydrocarbon sector dynamics, including disruption in oil production or exports,” S&P said.
“Our ratings on the UAE remain supported by the government’s strong fiscal and external positions. Our estimate of the exceptional strength of the government’s consolidated net asset position (estimated at 184 per cent of GDP in 2026) provides a significant fiscal external and economic buffer to external shocks. The UAE’s general government debt is very low (estimated at about 27 per cent of GDP in 2026) and its consolidated fiscal balance has averaged a surplus of 5.6 per cent over 2021-2025.
“We also believe the authorities will deploy their substantial policy flexibility to counteract the effects of volatility stemming from geopolitical tensions in the Gulf region on economic growth, government revenue, and its external accounts. We believe this flexibility will enable the UAE to withstand periods of low oil prices and, more importantly, the temporary disruption of oil production and export routes. We expect the general government will continue to run a fiscal surplus averaging 2.6 per cent of GDP over our forecast horizon to 2029.”
Tourism, trade (and supply chains), and financial services sectors will be vulnerable to conflict, along with investment and consumer confidence, S&P warned.
“We nevertheless expect the credit impact of regional conflict on the UAE’s economy to remain contained, thanks to its diversified economic base and large liquid asset buffer,” it said.
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