Agencies affirm Kingdom’s strong credit rating and predict stability despite global crisis

Short Url
Updated 10 April 2020

Agencies affirm Kingdom’s strong credit rating and predict stability despite global crisis

RIYADH: Saudi Arabia’s latest credit ratings, announced by international agencies on Thursday, affirmed the continued strength and resilience of the Kingdom’s economy in the face of the coronavirus crisis.

Fitch Ratings set the long-term credit rating at “A,” with a stable outlook. The agency said that this reflects the country’s financial strength, including exceptionally high foreign reserves, and low public debt ratio.

The global agency added that Saudi Arabia boasts one of the largest sovereign assets among counterpart countries, and confirmed the long-term credit rating of foreign bonds in the Kingdom at “A” with a stable outlook.

Fitch raised its estimates of real GDP growth for the current year to 4.9 percent from its 2 percent estimate last October. It expects real GDP to grow by 4.7 percent in 2021.

Moody’s updated credit report for the Kingdom set its rating at A1 with a stable outlook. The agency noted that the Kingdom is the second-largest oil producer in the world (including natural and condensed gas), has significant reserves and is highly experienced at extracting oil at the lowest costs. These factors offer the Kingdom a high competitive advantage over other producers, it said.

The agency raised its estimate for the 2020 budget deficit from 7.9 percent to 8.7 percent of GDP.

In March, S&P Global set its sovereign debt rating for Saudi Arabia at 2/A/A with a stable outlook. The agency’s view of the strong position of the Kingdom’s net assets was a major support factor for its ratings.

The positive reports from the global agencies reflect their confidence in the strength of the Saudi economy, as well as the nation’s strong financial position and its ability to continue to grow and face challenges, despite the exceptional worldwide health crisis.

Greece readies revival of coronavirus-hit economy

Updated 3 min 16 sec ago

Greece readies revival of coronavirus-hit economy

  • Tourism accounts for around 20 percent of Greek gross domestic product
  • Greece desperately needs to attract visitors this year

ATHENS: Greece geared up Thursday to revive its tourism-dependent economy, which shrank in the first quarter owing to measures against the coronavirus, the Elstat data agency said.
Prime Minister Kyriakos Mitsotakis is to headline an event later in the day to unveil a national tourism campaign for the virus-shortened season.
He has already warned the country that the economy would fall into a “deep recession” this year before rebounding in 2021.
Tourism accounts for around 20 percent of Greek gross domestic product (GDP), so it is crucial that visitors be attracted back to the nation’s beaches and iconic island villages.
Toward that end, Greece has announced a ‘bridge phase’ between June 15 and 30, during which airports in Athens and Thessaloniki will receive regular passenger flights.
Other regional and island airports are to open on July 1.
Greece plans to impose a seven- to 14-day quarantine only on travelers from only the hardest-hit areas as identified by the European Union Aviation Safety Agency (EASA).
Sample tests will also be carried out at entry points for epidemiological purposes however.
Provisional data released by Elstat showed how important it is to get the tourism sector back on its feet.
GDP fell by 1.6 percent in the first quarter of 2020 compared with the previous three months, and by 0.9 percent year-on-year, the data showed.
But data for March alone showed that month was not as bad as expected, government spokesman Stelios Petsas told a press conference.
Now, “Greece is opening its gates to the world under safe conditions for tourism workers, for residents of tourism destinations and of course, for our visitors,” he said.
With fewer than 180 coronavirus deaths among 11 million residents, Greece seeks to market itself as a healthy holiday destination.
On Tuesday, Athens said it was suspending flights to and from Qatar until June 15 after 12 people on a flight from Doha tested positive for COVID-19.
Earlier Thursday, Greek media reported that a first batch of nearly 190 tests among residents of the Cycladic islands, one of Greece’s most popular destinations, had turned up negative.
The country desperately needs to attract visitors this year.
The latest finance ministry estimate suggests that for 2020 as a whole, business activity could drop by up to 13 percent from the level in 2019.
Between 2009 and 2018, Greece suffered its worst economic crisis in modern times, and had begun to slowly regain some of the lost ground before it was hit by the impact of coronavirus restrictions.
The country was shut down for six weeks, and the International Monetary Fund forecast in May that GDP would decline by 10 percent this year before growing by 5.5 percent in 2021.