Fitch confirms the positive assessments of Abu Dhabi and expects growth of 7.9% in 2022

Abu Dhabi: Ahmed Al-Bashir
Fitch confirmed Abu Dhabi’s long-term and short-term sovereign credit ratings at AA and F1 +, respectively, with a stable outlook.
The agency said the ratings granted to Abu Dhabi reflect a number of supporting factors, including high GDP per capita and strong internal and external financial measures, as Abu Dhabi’s public debt is among the lowest sovereign debt at the time. world, while the emirate’s total sovereign debt is among the highest rates in the world.
Fitch expects Abu Dhabi to record a financial surplus of 19.2% of GDP in 2022, after posting an 8% surplus in 2021, as the emirate’s increased oil revenues will help offset the increase in domestic spending. , predicting that spending will remain less than 300 billion dirhams (27% of GDP) in 2022.
In a related context, the agency predicts that Abu Dhabi will maintain financial and financial surpluses during fiscal year 2023-2024, as oil prices are gradually heading towards the price of $ 53 per barrel by 2025, according to forecasts. by Fitch.
Oil production in Abu Dhabi is expected to contract in 2023, in line with its “OPEC +” quota of 3,019 million barrels per day, before rising to an average of 3.2 million barrels per day by 2024, compared to 2.7 million barrels per day in 2021.
Abu Dhabi’s oil revenue accounted for 81% of financial revenue in the period between 2015 and 2022.
Fitch expects Abu Dhabi’s total public debt to remain below 20% of GDP, with expectations that it will remain stable through 2024. High interest rates are likely to prompt Abu Dhabi to reconsider its previous low-lending strategy. cost of investing in high yield Increase in debt through government-related entities and reduce future debt build-up.
The emirate’s sovereign foreign assets are projected to increase to 264% of GDP ($ 683 billion) by the end of 2024, compared to 227% of GDP ($ 673 billion) by the end of 2022, when transfers from Government to the Abu Dhabi Authority will be Investment «ADIA» limited in favor of other government entities. Sovereign foreign assets will be sufficient to cover more than 8 years of public spending.
Fitch estimates that government debt, including bank debt, excluding deposits, is more than 75% of GDP in 2021, compared to around 60% in 2019, due to the increase in bank debt.
Abu Dhabi’s real GDP is expected to increase by 7.9% in 2022, after recording growth of 1.9% in 2021, as the recovery of non-oil activity (4.5% in 2022, from 4.1 % in 2021) is accompanied by an increase It represents 11% of oil activity.
Abu Dhabi received a score of 5 in terms of sovereign stability, rights, rule of law, institutional quality and anti-corruption, as these scores reflect the great importance of the World Bank governance indicators in the Fitch rating model.
Abu Dhabi ranks high on the World Bank’s governance index, testifying to its record of domestic political stability, strong institutional capacity, effective rule of law and low level of corruption.