The international credit rating agency, S&P Global Rating has affirmed its foreign and local currency sovereign credit ratings of the Kingdom of Saudi Arabia (KSA) at ‘A/A-1’ with Stable Outlook.
The agency indicated in its report that this rating affirmation is a result of the continuation of the Kingdom’s economic and social reform agenda in recent years that will improve the Kingdom’s economic resilience and will continue to underpin the development of the non-oil sector and fiscal receipts.
Due to the acceleration in non-oil sector investment and robust consumption in the Kingdom, the agency forecasted GDP growth to average 3.3 percent in the medium term.
The agency expects strong growth in construction for Saudi Vision 2030 projects and in the service sector, supported by consumer demand and an expanding female workforce. S&P also projects fiscal deficits of around 2 percent of GDP over the 2024-2027 period.
The agency also praised that Saudi Arabia has embarked on a significant, rapid economic and social transformation program under the Saudi Vision 2030. In the lead-up to 2030, the agency expected to see an acceleration in investment projects that seek to establish new industries, such as tourism, and diversify the economy away from its primary reliance on the upstream hydrocarbon sector.
In 2023, S&P Global affirmed Saudi’s rating at “A-/A-1” with a stable outlook and stated that the kingdom would return to fiscal surpluses in 2024 on higher crude production as well as growth in its non-oil economy. The A-/A-1 rating indicates the obligor’s strong capacity to meet its financial commitments.
