{"id":95289,"date":"2025-03-16T00:00:00","date_gmt":"2025-03-16T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2025\/03\/16\/sp-global-ratings-upgrades-saudis-credit-rating-to-a\/"},"modified":"2025-03-16T00:00:00","modified_gmt":"2025-03-16T00:00:00","slug":"sp-global-ratings-upgrades-saudis-credit-rating-to-a","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/03\/16\/sp-global-ratings-upgrades-saudis-credit-rating-to-a\/","title":{"rendered":"S&P Global Ratings upgrades Saudi\u2019s credit rating to A+"},"content":{"rendered":"

S&P Global Ratings upgraded Saudi Arabia's long-term foreign and local currency issuer<\/strong> credit rating to A+ from A, with a stable outlook<\/strong>, according to a statement<\/a>. The ratings agency maintained its A-1 short-term foreign and local currency unsolicited sovereign credit rating, while the transfer and convertibility (T&C) assessment was revised to AA-, from A+. Reuters<\/a> and Bloomberg<\/a> also had the story.<\/p>\n

The rationale: <\/strong>The revised ratings came on the back of the Kingdom's progress in economic diversification, expansion of the non-oil sector to 70% of GDP, and development of the domestic capital market. S&P expects these factors to offset the risks associated with rising sovereign and external debt \u201cto pursue Vision 2030 goals and debt servicing costs.\u201d<\/p>\n

What could drive a further rating upgrade: <\/strong>S&P said it may consider another upgrade within two years if structural reforms and non-oil economic growth significantly boost GDP per capita and attract more private and foreign investment, reducing dependence on public spending.<\/p>\n

And what could bring the rating down: <\/strong>A downgrade can occur if debt accumulation across government and other sectors outpaces expectations, straining public finances and weakening Saudi Arabia\u2019s external position. \u201cThis could be the case if we saw a combination of a sharp ramp-up in investment projects funded by debt, along with a slowdown in growth, higher borrowing costs, and unfavorable movements in oil prices,\u201d the ratings agency said. <\/p>\n

The fiscal risk: <\/strong>Despite diversification progress, fiscal risks persist due to oil price sensitivity, with S&P forecasting prices to decline to USD 70 \/ bbl over 2025-2028, and the country\u2019s fiscal deficit to widen to 4.8% of GDP in 2025 from 2.8% in 2024. However, gradual borrowing will sustain the Kingdom\u2019s net external creditor status, maintaining a 32% net asset position through 2028.<\/p>\n

ICYMI- <\/strong>Last week, the PIF signed a USD 3 bn MoU<\/a> with Italy's state export credit agency Sace to help maintain the Kingdom\u2019s debt, adding to previous EUR 3 bn in loan guarantees<\/a>.<\/p>\n

\n

OTHER KEY INDICATORS- <\/p>\n

Real GDP growth is expected to come in at 4.0% this year, before picking up to 4.6% in <\/strong>2026<\/strong>, 3.7% in 2027, and %3.6 in 2028, driven by investments in construction, logistics, and manufacturing. <\/p>\n

REMEMBER- <\/strong>GDP grew 1.3% y-o-y in 2024<\/a>, exceeding the government\u2019s 0.8% forecast, while 4Q growth hit 4.5% y-o-y GDP, the fastest in two years, supported by oil and non-oil activity. The Finance Ministry expects GDP growth of 4.6%<\/a> in 2025, 3.5% in 2026, and 4.7% in 2027, fueled by non-oil expansion, job creation, and foreign investment.<\/p>\n

Inflation is expected to \u201cstay modest at 1.9% over the next four years,\u201d<\/strong> controlled by price caps and the SAR being pegged to the USD, despite rising housing costs and supply pressures. In comparison, inflation averaged 1.7% in 2024. <\/p>\n

Fiscal deficit:<\/strong> The credit rating agency sees the government running deficits averaging 4.2% of GDP during 2025-2028 on the back of large public investments, particularly in the run-up to major global events hosted in Saudi Arabia, including the Asian Winter Games in 2029, Expo 2030, and the FIFA World Cup 2034. <\/p>\n

Sovereign debt: <\/strong>Government debt is expected to rise gradually to 36.2% of GDP by 2028, up from about 25.4% in 2024.<\/p>\n","protected":false},"excerpt":{"rendered":"

Economic diversification and development of the capital market are set to mitigate rising sovereign debt<\/p>\n","protected":false},"author":1,"featured_media":95290,"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":[27,10,335,1365,1002],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-95289","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-economy","tag-enterpriseam-ksa","tag-gdp","tag-non-oil-economy","tag-sp-global","wpautop","entry"],"acf":{"mongo_id":"d6f2ee3f-ec3b-43f2-8b67-507159c2dc75","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/9\/712.jpg","photo_position":"above","homepage_title":"","full_issue_title":"S&P Global Ratings upgrades Saudi Arabia\u2019s credit rating to A+","related_issue":[95284],"teaser":"Economic diversification and development of the capital market are set to mitigate rising sovereign debt","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/3\/.fbd79595-a7c6-4754-aa7d-e60d3529c8a5.mp3"},"yoast_head":"\nS&P Global Ratings upgrades Saudi\u2019s credit rating to A+ - 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