Moody’s affirms Saudi Arabia’s credit rating at ‘A1’, outlook 'stable'

The Kingdom of Saudi Arabia's flag

Global rating agency Moody’s affirmed Saudi Arabia’s credit rating at ‘A1’, with 'stable' outlook.

In its report, the agency said the rating affirmation was a result of the government's continued development of fiscal policy and ability to respond and adapt to volatile oil prices, which reflects a commitment to fiscal consolidation and long-term fiscal sustainability.

According to a statement by the National Debt Management Center, Moody’s sees continued positive growth in the Kingdom’s real gross domestic product (GDP) at an average of 5% from 2021 to 2023. This is supported by further recovery from the coronavirus pandemic and remarkable progress in economic diversification, development and capital projects, and limited decline in oil production.

The agency expects the Kingdom to show continued commitment to fiscal control in the medium term and continued improvement in spending policy despite higher oil prices. This, accordingly, reflects a more effective framework of the public fiscal policy.

The recent assessments of Saudi Arabia’s financial institutions reflect the positive impact of structural measures and reforms taken by the Kingdom over the past five years. They also show the tangible progress in improving the business environment, which positively affected the effectiveness of fiscal policy and raising the efficiency of government work.

In March, S&P affirmed Saudi Arabia’s rating at “A-”, but revised its Outlook to “Positive” from “Stable”, citing improving GDP growth and fiscal dynamics over the medium term, according to data available with Argaam.

In July 2021, Fitch Ratings affirmed the Kingdom’s long-term foreign-currency issuer default rating (IDR) rating at “A”, and revised its Outlook to “Stable” from “Negative”.