Moody's Affirms Saudi Arabia's Rating at ‘A1’ with ‘Stable’ Outlookhttps://english.aawsat.com/home/article/3288381/moodys-affirms-saudi-arabias-rating-%E2%80%98a1%E2%80%99-%E2%80%98stable%E2%80%99-outlook
Moody's Affirms Saudi Arabia's Rating at ‘A1’ with ‘Stable’ Outlook
Moody's expected the Saudi economy to return to growth this year 2021 (Asharq Al-Awsat Arabic)
Ratings agency Moody's on Friday affirmed Saudi Arabia's rating at 'A1'and changed its outlook to "stable" from "negative", compared to its report published in June.
The agency predicted the Saudi economy will return to growth in 2021, as the fiscal deficit shrinks in 2021, accompanied by a reduction in the level of debt in the medium term.
Moody’s also praised the Kingdom's fiscal “policy responses in periods of both low and high oil prices.”
A stable outlook suggests that in addition to the economic recovery from the pandemic and improved oil prices, the financial position and net external assets of the Kingdom remain strong enough to support its credit rating.
Moody's expects that "This improvement will be sustained in the medium term because of the government's commitment to further fiscal consolidation over the coming years, including under the newly announced Fiscal Sustainability Program (FSP)."
"The FSP builds on the Fiscal Balance Program measures and reform initiatives implemented during the past five years, which increased non-oil revenue to more than 18 percent of non-oil GDP in 2020 from less than 10 percent in 2015 and reduced non-interest expenditure to 53 percent of non-oil GDP from 56 percent in 2015.
The FSP aims to further enhance fiscal discipline, improve the effectiveness of public finance management, and support the rebuilding of fiscal buffers." according to the report.
It added that "consequently, the government's debt burden will decline below 29 percent of GDP at the end of this year and further to around 25 percent of GDP by 2025 from 32.5 percent of GDP in 2020."
The agency estimated that the size of public debt to GDP in the coming years would fall between 25 percent and 30 percent, surpassing its estimations for comparable countries with the same credit rating of 35 - 40 percent.
"Moody's expects that overall spending will likely decline by around 6 percent this year, whereas the draft 2022 budget targets another 6 percent reduction next year," it noted.
In addition, the report commended the Kingdom’s strength in the oil market displayed in its capacity of producing oil at the lowest costs in comparison with other exporting countries.
Such advantage supports the Kingdom's economic resilience in the environment of low oil prices.
From Hydrogen to AI, Energy Leaders Map the Sector’s Global Futurehttps://english.aawsat.com/business/5329233-hydrogen-ai-energy-leaders-map-sector%E2%80%99s-global-future
From Hydrogen to AI, Energy Leaders Map the Sector’s Global Future
A panel discussion examines challenges and opportunities at the World Petroleum Congress in Riyadh (Asharq Al-Awsat)
Green hydrogen, artificial intelligence and strategic partnerships took center stage at the World Petroleum Congress in Riyadh, as sessions mapped the energy sector’s future amid rapid technological and industrial change.
Progress on clean energy projects, led by the NEOM Green Hydrogen Project, now 96% complete, intersected with the challenge of cutting emissions from transport, which accounts for about 30% of global energy demand.
The discussions highlighted a widening agenda: developing energy sources and reshaping how energy is produced and used to improve efficiency and sustain supplies.
Saudi Aramco said it plans to increase gas sales by 80% by 2030 compared with 2020 and 2021 levels, and to build and start operating six to seven gas and liquefied gas facilities between 2025 and 2027.
Decarbonization
Transport and logistics account for about 30% of global energy demand, Saudi Vice Minister of Transport and Logistics Services Rumaih Al-Rumaih told a conference session.
Decarbonization is a long journey that requires a broader energy mix, he said, stressing the need for available, reliable, affordable and safe supplies.
The Saudi Green Initiative provides a framework for reaching net-zero emissions by 2060, with transport playing a major role, Al-Rumaih said.
Saudi Arabia is expanding public transport and cutting urban emissions to meet its commitments, he added. The Riyadh Metro network spans 187 kilometers and has 85 stations.
Green hydrogen
National Development Fund Governor Abdulaziz Al-Arifi said the fund had provided financing and strategic support for the NEOM Green Hydrogen Project alongside local banks and other entities and organizations.
That support helped advance one of the clean energy sector’s leading projects, strengthening investment opportunities and local content, he told the conference.
ACWA Power Chairman Mohammad Abunayyan said local resources, knowledge and expertise accounted for about 90% of those used in new projects. He reaffirmed the company’s commitment to expanding investment and overcoming challenges on the ground in major global markets such as China.
At the same session, Saudi Aramco Executive Vice President of Gas Abdulkarim Al-Ghamdi discussed operational readiness and supply chains.
Resource localization under the company’s iktva program had reached levels ranging from more than 75% to 90%, he said, offering strong protection against external disruptions.
Saudi personnel and technological integration are the two pillars of sustained gas-sector growth and future resilience, he said.
Artificial intelligence
A panel at the 25th World Petroleum Congress explored how energy powers artificial intelligence, how the two sectors interact and how AI can sharpen decisions, improve operations and raise energy efficiency.
Speakers said development of the energy and electricity sectors under Vision 2030 aims to meet demand and attract investment, including in AI data centers that need reliable, competitively priced electricity.
The approach involves anticipating sectors’ needs and connecting them with investors. Speakers stressed the need to integrate infrastructure, data, technology and human expertise, drawing on Saudi Arabia’s strengths to develop solutions and bring them to global markets.
Smart meters
AI can improve forecasts of electricity loads and demand and detect grid faults early, helping planners respond faster, speakers said.
Smart meter data can track consumption, forecast bills, show electricity use by appliance and flag unusual usage.
In oil and gas exploration and resource development, particularly drilling, AI can analyze data in real time and combine engineering models with geological information.
This can speed up decisions, improve accuracy, shorten the gap between planning and execution, enhance safety and support risk assessments and investment decisions.
To expand these applications, companies must deliver tangible business value and integrate the tools into operations, speakers said.
They must also ensure data quality and timely collection, train personnel to assess outputs and keep people involved in final decisions, while using digital tools to reduce risks.
IMFC Extends Aljadaan's Term as Chair by One Yearhttps://english.aawsat.com/business/5329161-imfc-extends-aljadaans-term-chair-one-year
Saudi Arabia's Finance Minister Mohammed Al-Jadaan speaks during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)
Saudi Arabia's Finance Minister Mohammed Al-Jadaan speaks during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)
The International Monetary and Financial Committee (IMFC) of the International Monetary Fund (IMF) announced a request for a one-year extension of Saudi Finance Minister Mohammed Aljadaan's term as Committee Chair after his current term ends on January 3, 2027.
The move aims to ensure continuity in the Committee's work and maintain momentum in advancing its key priorities, including important ongoing reforms.
In a statement issued Tuesday, the IMF said Committee members had asked Aljadaan to extend his term as Chair for an additional year and that he had agreed. Aljadaan was selected to chair the Committee for a three-year term beginning January 4, 2024.
Committee members expressed appreciation for Aljadaan's leadership, saying the extension would help ensure continuity and sustain momentum in addressing the Committee's key priorities, including its efforts on important ongoing reforms.
The IMFC is the primary policy advisory body of the IMF's Board of Governors and comprises finance ministers and central bank governors. It deliberates on major policy issues facing the Fund and the international monetary and financial system.
The Committee has 25 members, reflecting the composition of the IMF's Executive Board. Each member country, or group of member countries that elects an Executive Director to the Board, appoints a representative to the Committee.
The IMFC normally meets twice a year, once during the Spring Meetings and again in the fall, alongside the Annual Meetings of the IMF and World Bank Group.
Diversified Oil Export Routes Pave the Way for Strong Saudi Economic Recovery in 2027https://english.aawsat.com/business/5329136-diversified-oil-export-routes-pave-way-strong-saudi-economic-recovery-2027
Diversified Oil Export Routes Pave the Way for Strong Saudi Economic Recovery in 2027
Cars drive past city skyscrapers in Riyadh on October 11, 2026. (Photo by Fayez Nureldine / AFP)
As war reshapes energy flows across the region, the International Monetary Fund (IMF) is forecasting a strong recovery for Saudi Arabia's economy in 2027, with growth projected at 7.9 percent, driven by renewed momentum in production and exports as disruptions to shipping ease. Compared with Gulf economies more exposed to disruptions in transit through the Strait of Hormuz, this forecast rests on Saudi Arabia's diversified oil export routes, which help cushion the impact of the shock.
The IMF has also revised its outlook for the Saudi economy in 2026, projecting a smaller contraction than in its previous forecasts. The trajectory of the recovery will therefore depend on how long the disruptions persist and how quickly energy and trade flows return to normal.
The IMF's forecasts reflect both the scale of the shock facing regional economies and the recovery expected as its effects subside. In its World Economic Outlook report, titled Resilience Under Strain, Urgent Choices, the IMF projects that the economies of the Middle East and Central Asia will contract by 0.3 percent in 2026, followed by growth of 6.3 percent in 2027.
Compared with its April estimates, the IMF lowered its 2026 forecast by 2.2 percentage points while raising its 2027 projection by 1.7 percentage points. The revisions reflect an assumption that the Strait of Hormuz will remain closed longer than previously expected, intensifying pressure on regional economies this year but setting the stage for a stronger recovery once it reopens and production, exports and transportation resume.
Under this scenario, the IMF expects GDP to contract by 16.7 percent in Kuwait, 16 percent in Iraq, 15.6 percent in Qatar and 11.3 percent in Bahrain in 2026. In 2027, all four economies are projected to rebound sharply, with Iraq growing by 19 percent, Qatar by 18.8 percent, Kuwait by 17.1 percent and Bahrain by 13.9 percent, as production, exports and logistics return to normal operations.
Saudi Arabia's Economic Outlook
By contrast, the IMF expects the disruptions to have a relatively less severe impact on Saudi Arabia. It has revised its estimate for the Saudi economy's contraction in 2026 to 3.3 percent, compared with 5 percent in its July forecast and 6.4 percent in April. At the same time, it raised its forecast for Saudi economic growth in 2027 to 7.9 percent, up from 2.4 percent in its July update and 3.4 percent in April. The Ministry of Finance, meanwhile, expects stronger growth of 12.8 percent, according to its pre-budget statement. Although the estimates differ in magnitude, they reflect optimism about the recovery next year, amid hopes that production, exports and trade will regain momentum as shipping disruptions ease.
This outlook is consistent with World Bank projections. In its October report on the economic outlook for the Middle East, North Africa, Afghanistan and Pakistan, the bank anticipated a strong rebound in regional growth in 2027, forecasting expansion of 7.8 percent for the region's economies, excluding Iran, if the conflict subsides by the end of 2026. It attributed the recovery primarily to the resumption of hydrocarbon production and exports as trade routes reopen and energy flows gradually normalize. In Saudi Arabia, the bank noted that the East-West Pipeline had enabled exports to be rerouted to the Red Sea port of Yanbu, helping the Kingdom limit the impact of disrupted shipping through the Strait of Hormuz.
The IMF's projected contraction for the Saudi economy this year is smaller than the Ministry of Finance's estimate of a 3.6 percent decline in real GDP in 2026. The recovery outlook also aligns with the IMF's findings during its July Article IV consultations with Saudi Arabia, when it highlighted the economy's resilience to disruptions in oil and trade flows, supported by diversified energy and logistics infrastructure and the ability to reroute shipments.
Oil Export Routes
Against this backdrop, Saudi Arabia is benefiting from multiple oil export routes and working to strengthen its ability to deliver supplies to global markets through the Red Sea. Energy Minister and Minister of Industry and Mineral Resources Prince Abdulaziz bin Salman announced a target of increasing oil export capacity to approximately 10 million barrels per day within two to three years by upgrading the East-West Pipeline and expanding its associated infrastructure. He also pointed to the possibility of temporarily converting a gas pipeline to transport oil, adding approximately 1.2 million barrels per day of capacity within seven to eight weeks before returning it to its original use to meet summer demand.
These measures strengthen the Kingdom's ability to diversify its export outlets, while the IMF's 2027 forecasts assume that production, exports and trade will return to normal as shipping disruptions ease.
In this context, data from Kpler showed that Saudi crude oil exports rose to 6.67 million barrels per day in September, reaching their highest level in seven months and returning to prewar levels. This reflects renewed momentum in the Kingdom's oil flows, supported by increased exports through the Strait of Hormuz since September, alongside the benefits of diversified export outlets.
Alongside the anticipated recovery, credit rating agency Moody's had forecast that spending restraint and a reprioritization of government investments would support a fiscal recovery in 2027 and help the Kingdom preserve fiscal space to continue its economic diversification projects. The agency noted that prolonged trade disruptions and additional spending had limited the fiscal improvement it previously expected, while disruptions to strategic maritime shipping routes could persist until mid-2027, potentially affecting oil production.
As for economic indicators, the IMF expects inflation in Saudi Arabia to reach 1.9 percent in 2026 and rise to 2.2 percent in 2027. It also projects a current account deficit equivalent to 3.5 percent of GDP this year, narrowing to 1.3 percent next year.
Saudi Minister of Energy Prince Abdulaziz bin Salman Al Saud speaks at the 25th WPC Energy Congress in Riyadh, Saudi Arabia, October 12, 2026. REUTERS
International Monetary and Financial Committee Meeting
These forecasts come as the repercussions of the war and its effects on growth, trade and energy flows dominate the agenda of the IMF and World Bank Group Annual Meetings, taking place in Bangkok from October 12 to 18.
Saudi Finance Minister Mohammed Al-Jadaan is leading the Kingdom's delegation to the meetings and chairing a meeting of the IMF's International Monetary and Financial Committee, which is discussing the global economic outlook, risks to growth, economic policy priorities and the Fund's role in helping member countries address current challenges. These discussions are particularly significant given the differing effects of the conflict on regional economies, from pressures caused by disruptions to production and trade to opportunities for recovery as energy flows and exports resume.
Saudi Arabia's Finance Minister Mohammed Al-Jadaan speaks during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)
Ultimately, the trajectory of Saudi Arabia's recovery in 2027 will remain tied to how quickly energy and trade flows are restored. Meanwhile, diversified export outlets and non-oil activities, together with the reprioritization of spending and investment, provide support for the economy's ability to overcome the repercussions of regional disruptions.
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