Fitch upgrades Saudi Arabia’s rating to A+ with a stable outlook

Fitch upgrades Saudi Arabia’s rating to A+ with a stable outlook

Saudi Gazette report RIYADH — Fitch Ratings has upgraded Saudi Arabia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘A+’ from ‘A’. The agency attributed the upgrade of the Kingdom’s rating to the strength of fiscal and external balance sheets , including the government debt/GDP ratio and sovereign net foreign assets (SNFA) with a stable outlook. The global credit rating agency said that foreign reserves excluding gold remained broadly stable in 2022, at $459 billion, as financial account outflows in the form of investments and deposits abroad offset the substantial current account surplus, accounting for 13.6 percent of GDP, valuing $150 billion. Saudi Arabia has one of the highest reserve coverage ratios among Fitch-rated sovereigns at 18 months of current external payments. Fitch expects reserves to decline marginally to $445 billion in 2023-2024, as the current account surplus falls close to 7.5 percent of GDP in 2023 and 4 percent in 2024, due to lower oil revenue, but that outward investments by large institutions such as the Public Investment Fund (PIF) and pension funds remain moderate. The gross government debt/GDP declined to 23.8 percent in 2022, half the ‘A’ median of 51 percent. “ Fitch forecasts that government debt/GDP will increase