Real GDP growth in Abu Dhabi accelerated to 9.3% in 2022 but it is expected to be broadly flat in 2023 due to the OPEC+ agreement to cut oil production, according to a recent report from S&P Global Ratings.
The paper expects Abu Dhabi’s oil production to increase over the medium term as OPEC+ quotas are lifted and capacity increases to 5 million barrels per day (bpd) by 2027 from about 4 million bpd.
The exceptional strength of the government’s balance sheet provides a buffer to counteract fiscal and external shocks, the report noted.
“We estimate the net asset position at about 360% of GDP in 2023. We do not expect it to require deficit over the period to 2026. on top of refinancing maturing debt, we assume the government will issue external debt of about $2 billion to maintain its presence in the market. The government gross debt stock will therefore rise toward 18% of GDP in 2026 from about 15% in 2022,” s&P said.
“The stable outlook reflects our expectation that Abu Dhabi’s fiscal and external positions will remain strong over the next two years, amid continued prudent policy making and our hydrocarbon sector assumptions,” the agency added.
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