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Fitch Affirms Saudi Arabia’s Rating at A, Revises Outlook to ‘Positive’

Fitch Affirms Saudi Arabia’s Rating at A, Revises Outlook to ‘Positive’

Friday, 15 April, 2022 - 09:30
A model for one of the ready-made factories adopted by MODON in the framework of innovation to enhance the strategy of enabling industry in Saudi Arabia (Asharq Al-Awsat)

Fitch Ratings revised on Thursday the outlook for Saudi Arabia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from “stable” to “positive”, while affirming the rating at "A".

The Kingdom's rating reflects improvements in the sovereign balance sheet due to higher oil revenues and commitment to fiscal consolidation.

The global ratings agency expects the Saudi government’s debt-to-GDP ratio to remain below 30% until 2025.

The government is estimated to maintain significant fiscal buffers, including deposits in the central bank that exceed 10% of GDP.

Fitch Ratings said that spending control is forecasted to continue despite higher oil prices, given uncertainty over long-term oil prices, in addition to the government's commitment to make the budget flexible against low oil prices in line with the fiscal sustainability program, and higher spending by the public sector to support economic growth and job creation.

In other news, the Saudi Authority for Industrial Cities and Technology Zones (MODON) opened 14 ready-made factories in the Al-Madina Al-Munawwara Industrial City to support entrepreneurs and SMEs.

MODON Spokesperson Qosai Abdulkarim stated that the Authority, in cooperation with partners in the public and private sectors, seeks to enhance the role of male and female entrepreneurs and SMEs in the GDP.

Abdulkarim revealed that the area of each of the factories reaches 1,500 square meters.

“Ready-made factories are one of MODON's innovative products to enhance its strategy towards empowering the industry and contributing to increasing local content and localizing clean and light industries such as food and medical products and electronic industries,” said Abdulkarim.

Abdulkarim noted that the coronavirus pandemic during the year 2020 highlighted the importance of the role of ready-made factories in supporting the national economy, through their contribution to providing the local market requirements of various food and medical products.

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