UAE's economic growth forecast to remain resilient at 4% until 2028

Zawya

5 hours ago

The UAE's economic growth is expected to remain resilient at around 4% from 2025 to 2028, supported by buoyant non-oil sector activity and rising oil output, according to S&P Global.
'Despite lower oil prices and headwinds from a global economic slowdown, we expect continued fiscal surpluses at the consolidated federal government and individual emirates level,' said Zahabia S Gupta, Director in Sovereign team at S&P Global Ratings.
Investment income on liquid assets will support an increase in the net asset position to an estimated 177% of GDP through 2028, she said.
S&P assigned 'AA/A-1+' long- and short-term sovereign credit ratings to the UAE.
The stable outlook reflects the rating agency's expectation that the UAE's consolidated fiscal and external positions will remain strong over the next two years amid continued prudent policymaking and resilient economic growth.
However, downside risks remain. A significant drop in per capita GDP due to slower-than-expected growth or higher population inflows could weigh on the outlook. Additionally, a notable increase in government interest costs from higher borrowing or external funding needs could add pressure, Gupta said.
S&P expects the general government (the federal government and its seven emirates) will run fiscal surpluses averaging 3.2% of GDP until 2028, assuming Brent oil prices of $60 per barrel in 2025 and $65 per barrel through 2028.
Government debt is expected to remain stable at about 28% of GDP over the next four years as the federal government and emirates, such as Abu Dhabi, plan to issue local currency debt to develop domestic capital markets, Gupta said.
The rating agency forecasts that rising oil production and robust prospects in the non-oil sector will underpin relatively strong economic growth in 2025-2026.
'The UAE continues to implement structural policies to improve the business environment, encourage foreign investment, and attract skilled foreign labour,' she said.
Gupta stated that S&P expects regional geopolitical tensions to have a limited effect on the UAE, given its strong asset base and record of domestic stability.