Saudi Arabia’s ‘A+’ rating reflects strength beyond oil

At a time of heightened geopolitical and economic uncertainty — shaped by the Russia-Ukraine war and tensions involving Iran, the US and Israel — Saudi Arabia has continued to demonstrate remarkable economic resilience. 

While conflicts and trade disruptions have weighed on the global outlook, the Kingdom has preserved its fiscal strength and financial stability, underscoring the effectiveness of its long-term economic strategy.

Fitch Ratings’ decision to reaffirm Saudi Arabia’s “A+” sovereign credit rating with a stable outlook reflects that resilience. More than a routine assessment, the rating is an endorsement of the Kingdom’s prudent fiscal management, substantial external buffers and ability to navigate external shocks while advancing the ambitious transformation agenda of Vision 2030.

According to Fitch, Saudi Arabia’s government debt burden and sovereign net foreign assets remain significantly stronger than those of similarly rated “A” and “AA” sovereigns. 

Large fiscal buffers, supported by government deposits and other public sector assets, continue to provide the flexibility needed to respond to changing global conditions without compromising fiscal stability.

Although Fitch expects real gross domestic product growth to moderate to 0.6 percent in 2026, the slowdown is projected to be temporary. Growth is forecast to accelerate to 2.9 percent by 2028, supported by the expected normalization of shipping through the Strait of Hormuz, stronger oil and petrochemical production, and a recovery in external demand.

Oil output is expected to increase following the reopening of the Strait, with continued exports through the East-West pipeline helping maintain supply during periods of regional disruption. While average production is forecast at around 9 million barrels per day — below 2025 levels — improving global demand and inventory rebuilding are expected to support the energy sector.

Equally important is the continued resilience of the non-oil economy. Although petrochemical export disruptions temporarily affected growth, domestic consumption has remained robust and business confidence continues to improve. These factors reinforce the strength of Saudi Arabia’s diversification strategy, with non-oil sectors increasingly driving economic expansion.

The Kingdom’s resilience is rooted in years of structural reform under Vision 2030. Economic diversification, regulatory modernization and investment-friendly policies have reduced dependence on oil revenues while creating new engines of sustainable growth across tourism, manufacturing, technology, logistics and financial services.

Strong public finances and a well-capitalized banking sector have further strengthened Saudi Arabia’s ability to absorb external shocks. Strategic investments in infrastructure, logistics and food security have improved supply chain efficiency and enhanced the economy's capacity to withstand disruptions while ensuring the steady availability of essential goods.

The Kingdom has also responded proactively to geopolitical risks affecting maritime trade. Given the strategic importance of shipping routes such as the Strait of Hormuz, Saudi Arabia has expanded logistics capabilities, diversified transport corridors and strengthened alternative export routes to safeguard trade flows and maintain market stability. These measures not only reduce vulnerability to regional disruptions but also reinforce the Kingdom's role as a reliable global energy and logistics hub.

Fitch’s latest assessment therefore reflects more than strong fiscal metrics. It recognizes Saudi Arabia’s disciplined policymaking, institutional stability and commitment to long-term economic planning. These qualities have enhanced investor confidence and strengthened the Kingdom’s reputation as one of the region's most resilient economies.

As Vision 2030 continues to reshape the economy, Saudi Arabia is becoming increasingly well positioned for sustained, broad-based growth. Continued investment in infrastructure, digital transformation, human capital and strategic industries will further strengthen competitiveness and expand opportunities for private-sector development.

While global uncertainty is likely to persist, Saudi Arabia enters this period from a position of considerable strength. Sound fiscal policies, diversified sources of growth and an unwavering commitment to reform have created an economy that is better equipped to withstand external shocks while delivering long-term prosperity.

Fitch’s reaffirmation of the Kingdom’s “A+” rating is therefore not merely a reflection of its current financial health. It is a vote of confidence in the direction of Saudi Arabia’s economic transformation and in its ability to emerge as one of the world’s most resilient, competitive and attractive investment destinations.

• Talat Zaki Hafiz is an economist and financial analyst.

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