A report by Standard & Poor’s regarding companies and infrastructure in the Gulf region for 2026 highlights that the UAE is leading the Gulf Cooperation Council (GCC) countries in economic diversification.
The nation continues to solidify its position as one of the strongest economies in the Gulf, achieving a credit rating of AA/stable/A-1+ for foreign currency, which is the highest alongside Qatar and Kuwait.
The report emphasizes significant progress in the UAE’s economic diversification efforts, with non-oil sectors contributing approximately 75% to the GDP, the highest share in the Gulf region.
According to the agency, this diversification has helped mitigate economic fluctuations and reduced the impact of oil price volatility on the UAE’s economy, promoting long-term economic stability.
The Standard & Poor’s report offers an optimistic outlook for the UAE economy, noting the strength of economic diversification, robust population growth, and stability in key sectors such as real estate, utilities, and telecommunications, along with a solid capacity to manage potential geopolitical and economic risks.
The agency predicts that the UAE will experience the highest population growth rate in the region over the next two years, driven by an influx of expatriates to Dubai and Abu Dhabi, encouraged by favorable tax reforms, safety, currency pegging to the dollar, and affordability.
Moreover, the report confirms that property developers in Dubai will continue to benefit from a market appealing to both local and international investors, supported by visa reforms and low taxes.
Companies
In March 2025, the agency upgraded Emaar Properties’ rating to BBB+ due to the company’s strong performance and operational profit margins averaging 50%, along with a solid net cash position.
The report noted substantial cash flow generation, and in November, the agency raised Damac’s rating to BB+, citing a significant buildup of expected revenues over the next two to three years.
The agency anticipates that the credit quality of real estate developers in the UAE will remain stable, supported by low leverage, strong future revenues, and increasing sales.
Standard & Poor’s has cautiously optimistic views on the retail real estate sector in the UAE for 2026-2027, foreseeing strong demand fueled by population growth, robust tourism, and changing consumer preferences.
The report asserts that investment activity in utilities remains strong in the UAE, backed by long-term energy transition goals, ongoing public sector support, and the solid financial fundamentals of major governmental entities.
The agency also projects an annual revenue growth for UAE telecommunications companies of 2-4% during 2026-2027, as high investments continue in fiber optic networks and 5G technology.
Masdar (AA- stable), a leader in renewable energy and sustainable infrastructure in Abu Dhabi, possesses a credit profile similar to utility companies, with a globally diversified asset base and a dual business model that combines new development with strategic acquisitions across solar, wind, and emerging technologies such as green hydrogen.
Masdar benefits from continuous, predictable government support, including regular capital injections from Abu Dhabi, reflecting the strategic importance and strong reputation of the entity, as well as its unique access to low-cost financing that supports its ability to maintain high leverage during investment cycles.
Strong Ratings
In the Gulf region, the agency confirmed that most rated companies within the GCC enjoy strong credit positions, enabling them to manage potential risks effectively despite expectations of a slight decline in oil prices and rising geopolitical tensions in the area.
The report anticipates that rated companies will benefit from high credit quality and sufficient liquidity margins, alongside robust support from high-rated governments.
The operational performance of Gulf companies is expected to remain resilient in 2026, underpinned by sustained government spending, stable consumer demand, and population growth, despite forecasts of Brent crude prices dropping to $60 per barrel in 2026 and $65 in 2027.
Standard & Poor’s forecasts strong economic growth in the Gulf region, averaging 3.25% during 2026-2027, driven by steady domestic demand, governmental infrastructure spending, and increased hydrocarbon production. The report confirms continuing supportive financial conditions.
Gulf companies issued bonds worth $9.7 billion in January 2026 alone, compared to only $2 billion in January 2025. However, the report warns that financing conditions may weaken if regional tensions persist, despite expectations of a 50 basis point reduction in interest rates by the Federal Reserve in the second half of 2026.