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Global Rating Agencies Expect Greater Growth for Saudi Economy

Moody's has updated Saudi Arabia's credit report to A1 with a stable outlook (Reuters)
Moody's has updated Saudi Arabia's credit report to A1 with a stable outlook (Reuters)
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Global Rating Agencies Expect Greater Growth for Saudi Economy

Moody's has updated Saudi Arabia's credit report to A1 with a stable outlook (Reuters)
Moody's has updated Saudi Arabia's credit report to A1 with a stable outlook (Reuters)

Global rating agencies have expected a greater growth for the Saudi economy.

Fitch and Moody's have affirmed Saudi Arabia's credit rating at A+ and A1 respectively, with a stable outlook.

This reflects the high level of confidence by global rating agencies in the Saudi economy on one hand, and the effectiveness of economic reforms taken by the Kingdom’s government on the other hand.

Credit ratings issued by global rating agencies provide important indicators for investors. Positive indicators prove the economy’s strength while demonstrating its vitality and effectiveness.

They commended the Kingdom’s non-oil revenue growth at 10.1 percent in 2018, which was driven by the Saudi financial reform program.

They noted that plans to diversify the Kingdom's economy away from oil are likely to contribute to the country's medium and long-term growth.

In this context, Saudi Arabia's Ministry of Finance has welcomed this rating.

Fitch Ratings maintained the Kingdom’s credit rating at A+ with a stable outlook on the back of the country’s financial strength, including foreign reserves, low public debt and large government assets.

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Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
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Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)

Saudi Arabia’s non-oil exports soared to a two-year high in May, reaching SAR 28.89 billion (USD 7.70 billion), marking an 8.2% year-on-year increase compared to May 2023.

On a monthly basis, non-oil exports surged by 26.93% from April.

This growth contributed to Saudi Arabia’s trade surplus, which recorded a year-on-year increase of 12.8%, reaching SAR 34.5 billion (USD 9.1 billion) in May, following 18 months of decline.

The enhancement of the non-oil private sector remains a key focus for Saudi Arabia as it continues its efforts to diversify its economy and reduce reliance on oil revenues.

In 2023, non-oil activities in Saudi Arabia contributed 50% to the country’s real GDP, the highest level ever recorded, according to the Ministry of Economy and Planning’s analysis of data from the General Authority for Statistics.

Saudi Finance Minister Mohammed Al-Jadaan emphasized at the “Future Investment Initiative” in October that the Kingdom is now prioritizing the development of the non-oil sector over GDP figures, in line with its Vision 2030 economic diversification plan.

A report by Moody’s highlighted Saudi Arabia’s extensive efforts to transform its economic structure, reduce dependency on oil, and boost non-oil sectors such as industry, tourism, and real estate.

The Saudi General Authority for Statistics’ monthly report on international trade noted a 5.8% growth in merchandise exports in May compared to the same period last year, driven by a 4.9% increase in oil exports, which totaled SAR 75.9 billion in May 2024.

The change reflects movements in global oil prices, while production levels remained steady at under 9 million barrels per day since the OPEC+ alliance began a voluntary reduction in crude supply to maintain prices. Production is set to gradually increase starting in early October.

On a monthly basis, merchandise exports rose by 3.3% from April to May, supported by a 26.9% increase in non-oil exports. This rise was bolstered by a surge in re-exports, which reached SAR 10.2 billion, the highest level for this category since 2017.

The share of oil exports in total exports declined to 72.4% in May from 73% in the same month last year.

Moreover, the value of re-exported goods increased by 33.9% during the same period.