UAE receives ‘AA/A-1+’ rating thanks to robust growth: S&P Global

S&P Global added that the UAE’s economic growth is expected to remain resilient at 4 percent over 2025-2028. Shutterstock
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Updated 18 June 2025
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UAE receives ‘AA/A-1+’ rating thanks to robust growth: S&P Global

  • Grades reflect the Emirates’ net asset position
  • First time S&P issued consolidated sovereign credit rating for entire UAE

RIYADH: S&P Global has assigned the UAE its “AA/A-1+” foreign and local currency sovereign credit ratings with a stable outlook as it expects strong fiscal and external positions to be maintained over the next two years.

In its latest report, the global credit rating agency said that the grades reflect the Emirates’ net asset position, which could provide a buffer to counteract the effects of oil price swings and geopolitical tensions in the Gulf region. 

According to the agency, this rating indicates a country’s strong capacity to meet its financial commitments. 

The strong rating of the UAE aligns with the broader trend observed in the Middle East region, and in March, S&P Global raised Saudi Arabia’s rating to “A+” from “A” with a stable outlook underpinned by the Kingdom’s ongoing social and economic transformation. 

In its latest report, the US-based agency said: “The stable outlook reflects our 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.”




A general view of the Burj Khalifa and the downtown skyline in Dubai, UAE. File/Reuters

This is the first time S&P has issued a consolidated sovereign credit rating for the entire UAE, as opposed to the individual emirates.

Non-oil sector to drive growth

S&P Global added that the UAE’s economic growth is expected to remain resilient at 4 percent over 2025-2028, driven by strong non-oil sector performance and a rise in activities. 

“Despite lower oil prices and headwinds from a global economic slowdown, we expect that continued fiscal surpluses at the consolidated federal government and individual emirates level, along with investment income on liquid assets, will support an increase in the net asset position to an estimated 177 percent of GDP (gross domestic product) through 2028,” the report said. 

S&P Global further said that the UAE government’s fiscal surpluses are expected to average around 3.2 percent of GDP through 2028, based on assumptions that Brent oil prices will stay around $60 per barrel in 2025 and $65 per barrel through 2028. 

Government debt will remain stable at about 28 percent of GDP over the next four years as the federal government and emirates, including Abu Dhabi, plan to issue local currency debt to develop domestic capital markets. 

According to the report, the country will have limited monetary flexibility given that the dirham is pegged to the US dollar. 

“This means the UAE’s monetary policy is closely aligned with that of the US Federal Reserve, regardless of domestic economic conditions. We also consider that the domestic local currency bond market remains underdeveloped compared with similarly rated peers,” added S&P Global. 

The report comes just days after an economic update prepared by the Institute of Chartered Accountants in England and Wales, in association with Oxford Economics, said that the economy of the UAE is projected to expand by 5.1 percent in 2025, driven by a recovery in oil output and a 4.7 percent rise in non-oil GDP, with tourism expected to emerge as a key element propelling this growth. 




A general view shows the Abra Station in font of the Deira Spice Souk in Dubai, UAE. File/Reuters

Earlier this month, the Central Bank of the UAE revealed that the Emirates’ GDP reached 1.77 trillion dirhams ($481.4 billion) in 2024, recording 4 percent growth, with non-oil sectors contributing 75.5 percent of the total. 

CBUAE added that the Emirates is expected to witness economic growth of 4.5 percent in 2025 before accelerating further to 5.5 percent in 2026.

The latest S&P Global analysis further said that the UAE’s oil production is projected to rise to about 3.5 million barrels per day by 2028, up from slightly less than 3 million in 2024, while the Ghasha gas and Ruwais liquefied natural gas are expected to significantly enhance Abu Dhabi’s production capacity.

The non-oil growth in the Emirates will be underpinned by public investment and government efforts to diversify the economy, combined with increasing trade and foreign investment. 

“Projects such as the Saadiyat cultural district and Disney Park in Abu Dhabi, and the Wynn integrated resort in Ras Al Khaimah seek to boost tourism revenue,” added the analysis. 

Affirming the growth of tourism in the country, a report released in April showed that Dubai recorded a 3 percent annual increase in international visitor numbers to 5.31 million in the first quarter of this year. 

According to the data released by the Dubai Department of Tourism and Commerce Marketing, the city also attracted 18.7 million international tourists in 2024, representing a 9 percent rise compared to the previous year. 

S&P Global added that the UAE would be modestly affected by the proposed 50 percent US tariff on steel and aluminum if no agreement is reached, as these metals accounted for 4.3 percent of the Emirates’ non-oil outbound shipments in 2023. 




People shop at The Dubai Mall in Dubai, UAE. File/Reuters

In 2023, the UAE exported approximately $1.4 billion worth of steel and aluminum products to the US, representing about 0.3 percent of its GDP.

The study further noted that the UAE has also introduced structural measures to enhance the business environment, which include a foreign direct investment law that permits foreign investors to fully own businesses in various sectors, as well as rules to liberalize personal and family law.

Another initiative is the Golden Visa Program, aimed at supporting talent retention by granting long-term residency to investors, entrepreneurs, and skilled professionals.

“We anticipate that these measures will increase labor market flexibility, investment, and foreign worker inflows. This will be balanced by the nationalization of the workforce, or ‘Emiratization’ policies,” added S&P Global.

Future outlook

The analysis further stated that the UAE’s credit rating could be upgraded in the future if Emirates implements significant measures to improve the effectiveness of monetary policy, such as establishing a deep domestic capital market. 

However, the rating could be downgraded if the UAE’s per capita wealth, currently at $47,000, starts declining due to lower economic growth or higher population inflows. 

“Downside pressure could also arise if the consolidated government interest burden were to increase materially because of higher borrowing, alongside elevated external financing needs,” added the report.


Mapping Saudi soils to grow better crops

Updated 47 min 51 sec ago
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Mapping Saudi soils to grow better crops

  • Palm trees, root crops, and coastal plants reveal the land’s story

RIYADH: Saudi Arabia’s land tells stories written beneath the feet. From fertile plains and rugged highlands to vast deserts, the Kingdom’s diverse landscapes shape what can grow, where it grows, and how agriculture can thrive.

Alongside geography and climate, soil conditions play a decisive role in agricultural success. Understanding soil types across the Kingdom helps determine which crops can flourish and what interventions may be needed to sustain them.

In an interview with Arab News, Turki Almutairi, a senior environmental specialist at the National Afforestation Center under the National Center for Vegetation Cover Development and Combating Desertification, outlined the main soil types found across Saudi Arabia.

High amount of salt makes the soil unfit for the production of most crops, even if the soil is fertile. (Supplied)

“The dominant soil in the Kingdom are sandy desert soils, alongside calcareous soils in the central region. Rocky and stony soils are present along mountainous and hilly landscapes,” he said.

“Alluvial soils are common in wadies (valleys), while saline and sodic soils are located in depressions (Sabkhas) and along coastlines. Pockets of clayed soils can be also found around few sites along the Kingdom.”

The Kingdom’s vast territory gives rise to unique soil characteristics in each region, enabling different crops to grow depending on local conditions.

“Soil is the growing medium for plants. The role of soil includes structural stabilization, providing nutrients and a communication medium for plants,” Basil Nasir, soil lead at engineering consultancy William Sale Partnership, told Arab News.

Basil Nasir, soil lead at the engineering consultant company, William Sale Partnership (WSP). (Supplied)

According to Nasir, assessing soil use is essential before determining whether it is fertile or infertile, as different soils support different plant types.

“The soil used for trees differs from the soil used for ornamental plants and from the soil used for aquatic plants. It varies according to the specific needs of each plant, and based on this, we determine what the soil requires and assess its fertility,” he said.

Nasir explained that soil characteristics are shaped by both physical and chemical components. In addition to water and air, mineral particles such as sand, silt and clay are key indicators of soil health. Organic matter, derived from plant and animal remains, forms the fourth major component.

The balance between these elements determines soil behavior. One important physical trait is water-holding capacity, which influences what types of plants a soil can support.

 

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“If the soil is like dunes, adding water will cause it to run off, but if the soil is clay, its ability to retain water will be very high. If you add water and return the next day, you will find that the water is still there,” said Nasir.

Chemical properties, such as whether soil is alkaline or acidic, are equally important. Understanding both physical and chemical traits allows for proper assessment and treatment when needed.

“What determines whether a plant is suitable for a particular environment is primarily the plant's nature. For example, some plants have fibrous roots and therefore do not require well-draining soil,” Nasir added.

“A palm tree, for example, does not care whether it was planted in one soil or the other because its roots are fibrous. Therefore, palm trees are strong plants and are suitable to grow in both dry and wetlands, while preferring sandy areas.”

Soil Salinity can be treated through Soil leaching which means washing the soil with certain amount of water to reduce the salt in it. (Supplied)

Crops such as potatoes, onions, carrots and beetroots — where the edible part grows underground — typically thrive in sandy soils. As a result, plantations of these crops are commonly found in northern regions such as Hail and in Wadi Ad-Dawasir.

In the eastern region, including Al-Ahsa, wetlands are more common due to climatic conditions. Growing plants in such environments often requires human intervention.

“Plants that are coastal or could be found in lagoons or lakes must have some sort of soil around them, like lotus flowers and mangrove trees.”

“An important parameter to keep in mind is that there is no air in its soil, and they are adapted to this condition. However, the lack of air, along with the presence of organic matter, will create a situation where anaerobic bacteria react with the soil, potentially causing diseases we can easily avoid,” said Nasir.

He emphasized that removing organic matter from such soils is essential to ensure plant survival in aquatic environments.

Mountainous and rocky regions in Saudi Arabia are generally volcanic, resulting in low water-holding capacity and challenging growing conditions. However, volcanic ash contributes to high fertility, allowing certain crops to flourish.

As a result, western regions support tree crops such as coffee, mangoes, some banana varieties and pomegranates.

There are various types of soils such as clay, sandy, silty and loamy. Each type provides excellent conditions for specific plants. (Supplied)

As development accelerates across the Kingdom, soil improvement efforts are expanding under the National Greening Program.

“Soil is considered fundamental for the National Greening Program’s objectives. Understanding the soil variability along the Kingdom is a precondition for fostering sustainable soil management,” Almutairi told Arab News.

Adding, “In this line, the NGP is working towards the establishment of the Saudi Soil Information System (TURBA-KSA), which consists of mapping soils and its functional properties in the Kingdom using state-of-the-art technology.”

He also noted the creation of the “Land Rehabilitation Watch” to report, verify and monitor land rehabilitation nationwide.

“This milestone allows the Kingdom to understand how soil and land health are progressing against national and international targets of land degradation neutrality. Documenting good soil and land management practices is also important, so that those successful practices could be scaled up along the Kingdom, which is a priority task for NGP,” he said.

Raising public awareness is another key pillar of the program.

“Assessing different emerging technologies and soil amendments is a daily activity of NGP, as it then provides technical support to partners on the selection and application of these technologies.”

DID YOU KNOW?

• Saudi Arabia cultivates around 1 million hectares, mainly in Riyadh, Qassim, Hail, and Jouf.

• Farming follows the seasons: winter brings onions, garlic, and carrots, while summer yields watermelon, tomatoes, and cucumbers.

• The Kingdom is a top date producer, with over 31 million palm trees generating nearly 1.54 million tons, especially in Riyadh and Qassim.

Almutairi stressed that soil is often overlooked because it lies unseen beneath the surface, despite its critical role.

Yet soil produces 95 percent of food, stores water, holds more carbon than vegetation and the atmosphere, suppresses contaminants, regulates water, carbon and nutrient cycles, and hosts microorganisms linked to the human microbiome.

He emphasized the need to engage the general public, particularly urban communities disconnected from nature. Education helps people understand where food comes from and how contact with soil — such as walking barefoot — can support well-being. Healthy soils also contribute to cleaner water and air, he added.

Almutairi also called for stronger advocacy among decision-makers, noting that investment in healthy soils supports climate action, food security and sustainable development.

He concluded that key strategies include officially observing UN World Soil Day on Dec. 5, integrating soil education into curricula, launching annual social media campaigns, using art to raise awareness, and organizing public events that connect soils to everyday life.