{"id":93949,"date":"2025-02-02T00:00:00","date_gmt":"2025-02-02T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2025\/02\/02\/another-a-from-fitch\/"},"modified":"2025-02-02T00:00:00","modified_gmt":"2025-02-02T00:00:00","slug":"another-a-from-fitch","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/02\/02\/another-a-from-fitch\/","title":{"rendered":"Another A+ from Fitch"},"content":{"rendered":"

<\/strong>Fitch R<\/strong>atings affirmed Saudi Arabia\u2019s long-term foreign-currency issuer default rating at A+ with a <\/strong>stable outlook<\/strong>, citing its robust fiscal position and strong external balance sheets, it said in a note<\/a> on Thursday. <\/p>\n

Behind the rating: <\/strong>Fitch said the \u201cgovernment\u2019s debt-to-GDP [ratio] and sovereign net foreign assets are considerably stronger than both the A and AA medians.\u201d It also cited \u201csignificant fiscal buffers\u201d in deposits and other public sector assets.<\/p>\n

The same challenges persist: <\/strong>The ratings agency repeated its assessment from February 2024<\/a> that \u201coil dependence, low World Bank governance indicators and vulnerability to geopolitical shocks remain relative weaknesses.\u201d Still, governance is improving as policymakers push ahead with social and economic reforms and cabinet works to strengthen the effectiveness of state agencies and institutions.<\/p>\n

Oil recovery will boost growth, but lower prices could increase deficits: <\/strong>Oil production is set to recover as Opec+ cuts are gradually lifted, which will underpin 2.7% growth in the oil sector in 2025, and 6.4% in 2026, Fitch projects. However, lower crude prices \u2014 forecasted at USD 70 per barrel in 2025 \u2014 are expected to reduce oil revenues, causing the 2025 budget deficit to widen to 3.8% of the Kingdom\u2019s GDP. This is higher than the government target of 2.3% for 2025 and the 2.8% estimated in 2024.<\/p>\n

The deficits could weaken external balance sheets: <\/strong>Government expenditure needs might drive an increase in external borrowing. Meanwhile, domestic investments are also expected to overshadow foreign asset acquisitions, in line with the government\u2019s targets to boost investments inside the Kingdom and as the Public Investment Fund shifts its strategy to focus on domestic investments<\/a>.<\/p>\n

A \u201cstrong and resilient\u201d non-oil sector: <\/strong>Fitch projects non-oil growth in 2025 and 2026 to come in at \u201ca similar pace\u201d as 2024 \u2014 where growth recorded 4.3% \u2014 driven by reforms and government investments, while maintaining resilience to declining oil prices.<\/p>\n

Geopolitical risks are waning: <\/strong>Regional conflicts seem to be less of a risk to the Kingdom as things stand currently, with the country set to play an active role in reconstruction efforts across the region. Geopolitical factors had no substantial impact on the Saudi economy in 2024, Fitch argues.<\/p>\n

Major changes could affect ratings in the medium-term<\/strong>, including a debt-to-GDP ratio far above Fitch forecasts, lack of productive investments in the Kingdom\u2019s economy, or a major geopolitical escalation over an extended period, Fitch said.<\/p>\n","protected":false},"excerpt":{"rendered":"

The ratings agency projects a \u201cstrong and resilient\u201d non-oil sector<\/p>\n","protected":false},"author":1,"featured_media":93950,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2571],"tags":[27,10,3310,335,3947],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-93949","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-economy","tag-enterpriseam-ksa","tag-fitch","tag-gdp","tag-growth","wpautop","entry"],"acf":{"mongo_id":"73155eff-b38b-44de-a092-828fd687c279","order":"4","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/9\/853.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Fitch affirms the Kingdom\u2019s A+ credit rating, forecasts oil, non-oil GDP growth","related_issue":[93942],"teaser":"The ratings agency projects a \u201cstrong and resilient\u201d non-oil sector","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/2\/.677a8e66-9cb7-417b-a564-35de2940fb79.mp3"},"yoast_head":"\nAnother A+ from Fitch - 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