Prime Highlights:
- Most GCC companies are expected to keep stable credit profiles in 2026, backed by strong finances, liquidity, and government support.
- Economic growth in the region is projected at 2–4% in 2026–27, driven by local demand, infrastructure projects, and higher oil production.
Key Facts:
- About 66% of S&P-rated GCC companies are investment-grade, with 97% having stable outlooks.
- Non-oil sectors now account for 75% of UAE GDP and 71% of Saudi Arabia’s GDP, reducing economic volatility.
Background:
Most companies in the Gulf Cooperation Council (GCC) are expected to keep stable credit ratings in 2026, S&P Global Ratings said. This comes despite regional tensions and slightly lower oil prices.
S&P’s report, “GCC Corporate and Infrastructure Outlook 2026: Stability Despite Uncertainty,” said strong finances, good liquidity, and government support will help companies handle risks. GCC economic growth is expected at 2–4% in 2026–27, supported by local demand, government projects, and higher oil output.
The report also noted that economic diversification is helping reduce volatility. Non-oil sectors now make up about 75 percent of the UAE’s GDP and 71 percent of Saudi Arabia’s. Average inflation is expected to remain near 2 percent over the next two years.
While geopolitical tensions, including US-Iran relations and potential disruptions in the Strait of Hormuz, remain risks, S&P expects only a limited impact on most corporates. The agency added that regional financial systems have historically shown resilience during crises.
GCC companies are in a strong financial position. In January 2026, they raised $9.7 billion, up from $2 billion the year before. S&P expects companies to need about $20 billion a year for refinancing over the next four years, and most have enough cash to cover it.
Different sectors are performing differently. Oil companies can manage lower crude prices. Telecom companies are expected to grow 2–4 percent a year. Infrastructure projects are supported by long-term contracts and government help. Chemical companies are struggling, and Dubai’s real estate growth is slowing.
About two-thirds of S&P-rated GCC companies have strong ratings, with most outlooks stable. More than half are government-related and receive support from the state.
Overall, S&P expects GCC companies to keep stable ratings in 2026, thanks to strong finances, government backing, and solid business models, even though oil prices and regional risks could affect them.
