• S&P affirmed the UAE's AA/A-1+ sovereign rating with a stable outlook on September 5, 2026.
• The rating rests on a consolidated net government asset position of roughly 147% of GDP for 2026 - S&P's primary shock absorber.
• S&P sees growth cooling to 2.4% in 2026 before accelerating to an average 6.2% in 2027-2029, with non-hydrocarbon output up 3-4% a year.
• General government debt stays low at about 26% of GDP (federal debt under 3%), with a projected fiscal surplus averaging 2.3% of GDP through 2029.
• UAE bank asset quality keeps improving: non-performing loans have fallen to 2.3% of total loans from 6.1% in 2021, per S&P's review.

S&P Global Ratings affirmed the United Arab Emirates' long- and short-term foreign- and local-currency sovereign credit ratings at AA/A-1+ on September 5, 2026, holding the outlook at stable and keeping the transfer-and-convertibility assessment at AA+, according to the agency's research update reported by Economy Middle East and Gulf News. The action leaves the UAE among a small cohort of sovereigns rated in the AA band, reflecting an assessment that near-term regional and sector pressures have not eroded the credit profile enough to move the rating in either direction.

The Buffer: 147% of GDP

The rating rests chiefly on the UAE's consolidated net general government asset position, which S&P puts at roughly 147% of GDP for 2026 - assets built up largely through Abu Dhabi's sovereign wealth vehicles. S&P frames this pile as the primary line of defense against shocks, from regional conflict risk to softer non-oil activity, letting the sovereign absorb swings in tourism, logistics and trade without pressuring the rating itself.

Growth: A Slower 2026, Then a Reacceleration

S&P projects UAE real GDP growth of 2.4% in 2026, before accelerating to an average of 6.2% a year across 2027-2029, per the agency's figures cited by Economy Middle East and Gulf News. Non-hydrocarbon output is forecast to grow 3-4% annually over the same 2027-2029 window, S&P said - the segment investors watch most closely for evidence the UAE's diversification push is translating into durable, ex-oil growth rather than one-off hydrocarbon swings.

Debt Stays Low, Surplus Persists

General government debt is projected at about 26% of GDP by end-2026, with federal government debt alone under 3% of GDP, S&P said. The agency estimates the consolidated general government fiscal balance will average a surplus of 2.3% of GDP over 2026-2029 - a combination of low leverage and persistent surpluses that gives the sovereign room to absorb spending shocks without needing to tap debt markets defensively.

External Position

S&P expects the UAE's current account to run an average surplus of roughly 13% of GDP over 2027-2029, per the figures reported by Gulf News, underscoring a hydrocarbon- and re-export-driven trade surplus that keeps external financing needs minimal. A wide current account cushion is one reason S&P treats external liquidity risk as low even amid regional volatility.

Banking Sector Quality Improving

S&P's review also flagged improving UAE bank asset quality: non-performing loans have fallen to 2.3% of total loans, down from 6.1% in 2021, while banks' net foreign assets stood at roughly $247 billion - about 42% of total domestic loans - as of June 30, 2026, according to Gulf News's reporting of the agency's figures. Cleaner loan books support the sovereign's own buffer by reducing the odds the government has to backstop the banking system.

What to Watch

The stable outlook signals S&P does not expect a rating change over its typical 12-24 month horizon unless the net asset buffer, oil-linked fiscal flows or non-oil growth trajectory shift materially. Watch whether 2026's softer tourism, logistics and non-oil activity - flagged in Economy Middle East's reporting - proves transitory ahead of the projected 2027-2029 reacceleration; a stall there is the main variable that could move the rating before S&P's next scheduled review. This is markets analysis, not investment advice.