S&P affirms Saudi Arabia's A-/A-2 credit rating with ‘Stable’ outlook

The Kingdom of Saudi Arabia's flag

S&P Global Ratings affirmed Saudi Arabia's A-/A-2 credit rating with a “Stable” outlook.

The stable outlook indicates that an emergence from the COVID-19 pandemic and an improvement in oil sector dynamics, along with the country’s government and external net asset positions, will support the ratings, the ratings agency said.

Higher oil prices, an easing of OPEC production quotas, and widespread vaccine rollout, will drive a rebound in economic growth in 2021-2024 , it noted.

S&P added that stronger oil prices in 2021 and higher output from 2022, alongside an increase in government revenue and cost efficiency policies, will support fiscal and external accounts during 2021-2024.

The rating agency also sees Saudi Arabia's deficit dropping from 11.2% last year to 4.3% in 2021, while averaging 5.7% in 2021-2024.

"However, a monthly easing of quotas through 2021 and 2022 will support the Saudi oil sector and economy," the agency said.