RIYADH: Moody’s Ratings affirmed the UAE’s Aa2 long-term sovereign ratings with a stable outlook, citing the country’s financial buffers, low federal debt and diversified economy despite disruption to trade through the Strait of Hormuz.
The agency also maintained the UAE’s foreign-currency senior unsecured debt rating at Aa2 and its medium-term note program rating at Aa2. Its local- and foreign-currency country ceilings remain at Aaa.
The latest assessment comes as Gulf economies navigate heightened geopolitical uncertainty stemming from disruptions to shipping routes and energy markets. Credit rating agencies have increasingly focused on the region’s fiscal strength, sovereign wealth buffers and progress in economic diversification when evaluating countries’ ability to withstand external shocks.
Moody’s said the UAE’s high per-capita income, effective policymaking and progress in developing non-hydrocarbon industries strengthen its capacity to absorb economic shocks.
However, Moody’s expects hydrocarbon production to decline as a result of the disruption.
