Economic Insights – Update
Fitch Ratings has reaffirmed Saudi Arabia’s credit rating at A+, maintaining a stable outlook, as outlined in its latest report.
The agency’s assessment highlights the country’s debt-to-GDP ratio, alongside net foreign sovereign assets that significantly exceed the average benchmarks for ratings within the “A” and “AA” categories. This positive evaluation is further strengthened by considerable public sector financial reserves, including deposits and other assets.
**Net Foreign Sovereign Assets as a Percentage of GDP**
According to Fitch’s projections, net foreign sovereign assets are anticipated to reach 63.7% of GDP during the 2024-2025 fiscal years, surpassing the average “A” rating of 54.9% by 8.7%. The agency also emphasizes that Saudi Arabia is actively pursuing financial reforms, enhancing the flexibility of its public budget in response to fluctuations in oil prices.
**Outlook for the Non-Oil Export Sector**
Fitch has expressed optimism regarding the robust growth expected in the non-oil export sector, bolstered by a continued reduction in the service balance deficit. This growth is largely driven by a surge in travel-related activities.
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