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.