Fitch affirms Abu Dhabi's AA rating with stable outlook

By Ovunc Kutlu

ISTANBUL (AA) - Fitch Ratings said Tuesday that it affirmed Abu Dhabi's long-term foreign-currency issuer default rating at ‘AA’ with a stable outlook.

The affirmation reflects Abu Dhabi's high GDP per capita and strong fiscal and external metrics, the rating agency said in a statement.

The rating, however, is constrained by its high dependence on hydrocarbons, a relatively weak but improving economic policy framework and low governance indicators compared with peers, it added.

Fitch expects Abu Dhabi to run fiscal surpluses of 5.4% of GDP in 2024 and 3.6% in 2025, after its estimate of 11% of GDP in 2023.

"We expect oil production to rise in line with OPEC+'s June 2024 agreement to reach 3.375 million barrels per day by December 2025, still well below Abu Dhabi's stated production capacity of 4.85 million barrels per day," said the statement.

The agency noted that it estimates global oil benchmark Brent crude to average $70 per barrel in 2025 and $65 in 2026.

"Hydrocarbon GDP will be near stable as OPEC+ quota cuts are unwound in line with the June 2024 decision," said the statement.

Fitch forecasts Abu Dhabi's real GDP to increase 2.4% this year after rising 3.1% last year.