Abu Dhabi (Emirate of)

This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile S&P Global Ratings expects relatively strong economic growth over 2022-2025 as OPEC members including the United Arab Emirates (UAE) step up energy production. Abu Dhabi's fiscal buffers of more than 250% of GDP underpin its creditworthiness. --We forecast that Abu Dhabi's real GDP growth will accelerate to above 5% in 2022 with real GDP reaching 2019 levels in 2023. --The emirate's fiscal balance remains closely correlated to oil price and volume movements, notwithstanding the addition of new nonoil revenue streams. --We expect regional geopolitical tensions will, on balance, have a limited effect on Abu Dhabi, and continued domestic stability. --Abu Dhabi's external balance

...We expect Abu Dhabi's oil production to increase on an annual basis as OPEC+ quotas are lifted and capacity increases to 5 million barrels per day (bpd) by 2030 from about 4 million bpd. We expect oil production to average 3.1 bpd in 2022, reaching about 3.4 million bpd by 2025. The exceptional strength of the government's balance sheet provides a buffer to counteract fiscal and external shocks, as well as the effects of high geopolitical uncertainty in the Gulf region. We estimate the government's net asset position at about 250% of GDP in 2022. We do not expect it to require deficit financing over the period to 2025. Nevertheless, the government is likely to issue external debt of about $7 billion annually, given its aim of building a yield curve. The government gross debt stock will therefore rise to about 30% of GDP in 2025 from about 19% in 2022....

Full Report