Abu Dhabi’s strong sovereign balance sheet has ensured the emirate has maintained its AA rating from US credit ratings firm Fitch.

Fitch has affirmed Abu Dhabi’s long-term foreign and local currency bonds and international depositary receipts rating at AA with a stable outlook.

Abu Dhabi’s financial position remains strong with sovereign foreign assets jumping by an estimated 182 per cent of GDP at the end of 2013. Direct sovereign external debt is just 1.2 per cent of GDP.

Fitch estimates the emirate’s GDP grew by 5 per cent in 2013. The ratings agency forecasts that high government spending, a strong pipeline of projects and the spill over from Dubai’s growing economy will maintain GDP growth at 4-5 per cent over the next two years.

The debt of government-related entities (GREs) and state-owned enterprises fell slightly as a percentage of GDP in 2013. Fitch says Abu Dhabi’s ability to support its GREs and state-owned companies “is not in question”.

The banking sector has also become more resilient, adds Fitch.

Non-performing loans at Abu Dhabi banks fell to 4.8 per cent of total loans at the end of 2013. This is the lowest recorded since the end of 2009.

The emirate’s economy is still heavily reliant on oil despite efforts to diversify the emirate’s economy. It currently accounts for 50 per cent of GDP and will remain a key driver of economic growth.

It has large proven oil reserves, with low production costs and the emirate is planning to increase its production capacity and downstream facilities.