Saudi Finance Minister Mohammed Al-Jadaan said on Tuesday strict fiscal discipline lay behind the Kingdom’s string of credit rating upgrades, arguing that Saudi Arabia has built a buffer against oil price shocks after restructuring its economy to lift the non-oil sector’s share to 56%.
Speaking to CNBC on the sidelines of the World Economic Forum in Davos, Al-Jadaan said dialogue, not confrontation, remains the only viable path to rebalancing global geoeconomic power.
He stressed that the Kingdom’s receipt of three credit rating upgrades last year was no coincidence, describing it as an international vote of confidence in the government’s fiscal discipline.
Global rating agencies and the International Monetary Fund are now clearly seeing the results of structural transformation, he remarked, noting that the Saudi budget is no longer hostage to energy price volatility, but instead rests on strong institutional foundations.
He also reaffirmed that Saudi-US relations remain “strategic” and ongoing at all levels of leadership and the ministerial level, adding that a previously cited figure of one trillion dollars in Saudi investment in the United States is not only realistic but could be exceeded.
The US market represents a core growth area, offering the Kingdom financial returns as well as knowledge and expertise transfers that serve national interests, the minister added.
In the face of the threat of global tariff hikes, Al-Jadaan called for resolving trade disputes through multilateral institutions, stressing that companies need certainty and that constructive dialogue with Washington and other strategic partners is essential to safeguarding global trade stability.
Investment discipline
Responding to questions about budget deficits alongside massive investments, Al-Jadaan outlined a different fiscal philosophy, describing the deficit as a deliberate policy design rather than a result of financial strain.
The Kingdom is borrowing to finance tomorrow’s growth, not today’s operating expenses, he said.
He pointed to last year’s three credit upgrades as evidence of the policy’s success, saying fiscal space is being managed with high discipline to channel resources toward jobs and gross domestic product, particularly as the non-oil economy now accounts for about 56% of total output.
Breaking the historical link
Asked about the US administration’s preference for oil prices around $50 a barrel, Al-Jadaan said Saudi Arabia has succeeded over the past decade in decoupling its economy from oil volatility, with non-oil revenues now making up 30% of total revenues.
He warned that excessively low prices could discourage global investment and trigger sharp price spikes in the future due to supply shortages, stressing that Saudi Arabia’s priority is market stability that balances the interests of both investors and consumers.
On monetary policy, Al-Jadaan underlined the Kingdom’s firm commitment to the riyal’s peg to the US dollar, calling it a cornerstone of stability and investor expectations.
He downplayed the impact of ongoing investigations into the US Federal Reserve on the Saudi economy, saying the Kingdom has policy tools beyond monetary policy that have kept inflation at very safe levels.
He added that markets determine long-term borrowing costs based on supply and demand, rather than short-term Federal Reserve decisions, helping reduce currency volatility risks and boost investor confidence.
Al-Jadaan announced a landmark step, starting on February 1, when the stock and real estate markets will be further opened to foreign investors.
The rise in institutional investor ownership in 2025 is a vote of confidence in the Saudi market's value, despite challenges, he stressed.
He warned, however, that the greatest risk facing any economy is complacency, stressing that Saudi Arabia is working institutionally to ensure sustainable results and that reforms no longer depend on daily interventions but have become a default approach whose benefits are felt by citizens and investors alike.
