Fitch affirms Saudi rating on robust balance sheet, buffers

Fitch affirms Saudi rating on robust balance sheet, buffers

Fitch Ratings has maintained Saudi Arabia’s rating at “A+”, supported by the kingdom’s robust fiscal and external balance sheets, including stronger debt-to-GDP ratio and sovereign net foreign assets. The affirmation is supported by significant fiscal buffers and other public sector assets, reflecting improved governance through ongoing social and economic reforms and efforts to enhance efficiency […]Fitch Ratings has maintained Saudi Arabia’s rating at “A+”, supported by the kingdom’s robust fiscal and external balance sheets, including stronger debt-to-GDP ratio and sovereign net foreign assets.

The affirmation is supported by significant fiscal buffers and other public sector assets, reflecting improved governance through ongoing social and economic reforms and efforts to enhance efficiency across government institutions.

“Oil dependence, low World Bank governance indicators and vulnerability to geopolitical shocks remain relative weaknesses,” the ratings agency said.

The gross government debt-to-GDP ratio rose to 26.5 percent of the estimated GDP in 2023 but remained low.

“We forecast that government debt/GDP will increase to 28 percent in 2024 and 30 percent in 2025. This assumes that Brent crude oil prices average $80 per barrel in 2024 and $70 per barrel in 2025, contributing to budget deficits and constraining nominal GDP.”

Fitch expects a budget deficit of 2.3 percent of GDP in