S&P Global affirms Saudi Arabia’s ‘A/A-1’ ratings; outlook stable

S&P Global affirms Saudi Arabia’s ‘A/A-1’ ratings; outlook stable

NEW YORK: S&P Global Ratings affirmed its ‘A/A-1’ foreign and local-currency unsolicited sovereign credit ratings on Saudi Arabia. The outlook is stable. At the same time, the agency maintained its ‘A+’ transfer and convertibility (T&C) assessment on the sovereign. The stable outlook balances the expectation that the government’s reform agenda will continue to underpin the development of the non-oil sector and support non-oil growth and fiscal receipts, against the cyclicality of a still hydrocarbon-focused economy, with fiscal and societal pressures tied to a growing population.

“We could raise the ratings over the next two years if reforms progress further, alongside strong real per capita economic growth and fiscal discipline. Furthermore, measures to strengthen institutions that, for example, further support the development of domestic capital markets, could be positive for the ratings,” the agency said its report. “Reforms in the past few years, including measures to drive non-oil economic growth and widen the non-oil tax base, alongside significant social liberalization, should continue to improve Saudi Arabia’s economic and fiscal profile,” the rating agency said on Friday.

Saudi Arabia’s economy grew by 1.2 per cent in the second quarter of this year, a slightly faster pace than the initial estimates, driven by a sharp