Abu Dhabi’s GDP is expected to grow 2.5 percent in 2025 and accelerate to 3.5 percent on average over 2026-2028, underpinned by still-buoyant non-hydrocarbon activity rising 3 percent a year.
In its latest credit rating update, S&P Global Ratings said the emirate’s sovereign credit rating for both foreign and local currency is AA/Stable/A-1+. The ratings agency also expects that regional tensions will have a limited effect on Abu Dhabi, amid continued domestic stability.
“We expect Abu Dhabi’s oil production will increase gradually since OPEC+ quotas are partially lifted and state-owned oil producer, refiner, and distributor ADNOC increases its capacity to 5 million bpd by 2027 from 4.85 million bpd currently. Over the next few years, we expect the Ghasha gas and Ruwais LNG projects to significantly enhance Abu Dhabi’s gas production capacity,” the report added.
Abu Dhabi’s GDP per capita expected at $75,400 in 2025
The stable outlook reflects S&P’s expectation that Abu Dhabi’s fiscal and external positions will remain strong over the next two years, amid continued prudent policymaking and hydrocarbon sector price assumptions.
Abu Dhabi has a population of around 3.8 million, of which about 20 percent are UAE nationals. Based on new census data, S&P estimates Abu Dhabi’s revised GDP per capita to be about $75,400 in 2025, and one of the highest levels of the 137 sovereigns the agency rates.
However, the average change in real GDP per capita over 10 years is about zero, primarily because of historical population growth from high numbers of migrants.
“We assume the population will continue to increase by about 3 percent annually to 2028, on new job creation, socioeconomic reforms in the UAE, and large infrastructure projects that will continue to drive migrant inflows. We expect domestic demand and investment will remain resilient amid strong regional demand,” S&P added.
City advances economic diversification efforts
Oil revenues remain the main source of Abu Dhabi’s economic prosperity, and the emirate has accumulated comfortable buffers against potential external shocks. In absolute terms, the UAE is the sixth-largest crude petroleum exporter in the world. Its proven crude reserves are the fifth-largest within OPEC, and the highest of all OPEC members per capita. Abu Dhabi derives about 50 percent of its real GDP directly from the oil sector.
Despite the large dependence on oil revenues, Abu Dhabi’s real GDP accelerated to 3.8 percent in 2024 from 2.4 percent in 2023, supported by a 6.2 percent expansion of the non-oil sector. The finance and insurance, construction, manufacturing and wholesale and retail trade sectors were the strongest contributors to that growth, reinforcing Abu Dhabi’s economic diversification efforts.
The non-oil economy contributed 54.7 percent of total GDP, its highest share ever. Meanwhile, the oil sector saw modest growth of 1.1 percent, affected by the extension of OPEC+ oil production cuts in 2024.
“Although geopolitical tensions remain elevated, our base-case scenario envisions that regional conflict escalation will have a limited impact on Abu Dhabi’s domestic economy and social stability. The Abu Dhabi Crude Oil Pipeline has the capacity to deliver about 50 percent of the emirate’s oil exports directly to the Fujairah terminal on the Indian Ocean, bypassing the Strait of Hormuz,” added the report.
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Abu Dhabi accumulates largest net asset positions of all sovereigns
S&P also expects Abu Dhabi’s considerable fiscal buffers will be sufficient to offset the potential financial impact of increased regional political risks. To limit the impact of oil price fluctuations, the government has also accumulated one of the largest net asset positions of all sovereigns we rate, estimated at 327 percent in 2025.
At the same time, the UAE government has pledged to make the country carbon neutral by 2050 and plans to invest heavily in alternative energy sources that are both renewable and clean.
“Abu Dhabi recorded a fiscal surplus of 6.7 percent of GDP in 2024, consistent with 2023 levels. We expect the surplus will narrow to 2.8 percent of GDP in 2025 before widening to about 6.0 percent on average over 2026-2028. This is based on our oil price and production assumptions, alongside continued expenditure restraint around AED300 billion.”
The emirate will likely start collecting revenue from corporate income tax in the first quarter of 2026. The agency estimates this will add AED8 billion-10 billion to revenue annually.
