UAEs GDP will grow 3% in 2020

UAE –  The strong financial position of Abu Dhabi’s government along with its developed infrastructure, high per capita income, and vast hydrocarbon reserves support the UAE’s credit profile Aa2 rating, with a stable outlook, according to Moody's Investors Service’s annual report.

That stable outlook is an indicator of the GCC country’s sovereign ratings' balance, Moody's Analyst and report's co-author Thaddeus Best said.

"Its credit profile is supported by the stable outlook on the Abu Dhabi sovereign rating and upside potential from diversification efforts, but is constrained by lingering government-related entity contingent liabilities and geopolitical tensions,” Best added.

One of the negative credit pressure on the UAE is its reliance on hydrocarbons, which accounted for 43% of the government revenue in 2018.

Moody's expects that the UAE’s GDP will grow 3% in 2020, boosted by the easing of oil output cut and fiscal policy.

“A decline in contingent liability risks or reduced regional geopolitical tensions would be positive for the UAE's credit profile, particularly if combined with improvements in policy transparency and data availability at the emirate and federal level,” the report revealed.