'S&P' Raises Saudi Arabia's Credit Rating to A/A-1 with Stable Outlook

The agency forecasts the non-oil sector to remain strong through 2026 (File/AP)
The agency forecasts the non-oil sector to remain strong through 2026 (File/AP)
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'S&P' Raises Saudi Arabia's Credit Rating to A/A-1 with Stable Outlook

The agency forecasts the non-oil sector to remain strong through 2026 (File/AP)
The agency forecasts the non-oil sector to remain strong through 2026 (File/AP)

The world credit rating agency ”S&P Global Rating” updated its credit report for the Kingdom of Saudi Arabia raising its long and short-term foreign and local currency sovereign credit ratings to 'A/A-1' with Stable Outlook.

The agency indicated in its report that this rating upgrade is a result of the Kingdom's significant reforms efforts in recent years and its realization of structural improvements that contributed to supporting a sustained development of the non-oil sector, in addition to improving public finance management and maintaining balanced public debt level.

The agency highlighted the strong real GDP growth of 8.7% in 2022, the highest among the G-20 economies. It expects moderate economic growth, averaging 2.6% in 2023-2026 with GDP/capita averaging $31,500 (significantly above pre-pandemic levels).

The agency forecasts the non-oil sector to remain strong through 2026 due to service sector growth supported by the significant ongoing social reforms and female workforce participation. It also expected the continuity of fiscal surpluses through 2024 (after reaching 2.5% of GDP in 2022).

The report indicated that inflation in the Kingdom is relatively low compared to its peers. It expected that it will remain under control thanks to the government efforts in subsidizing fuel and food, as well as the currency peg to the relatively strong US dollar.



Saudi Crown Prince Announces 'King Salman Automotive Cluster' in KAEC

Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud. Asharq Al-Awsat
Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud. Asharq Al-Awsat
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Saudi Crown Prince Announces 'King Salman Automotive Cluster' in KAEC

Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud. Asharq Al-Awsat
Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud. Asharq Al-Awsat

Prince Mohammed bin Salman bin Abdulaziz Al Saud, Saudi Crown Prince and Prime Minister, has designated “King Salman Automotive Cluster" as the official name of the cluster for automotive manufacturing activities, located within King Abdullah Economic City (KAEC).
The hub will be a crucial step in Saudi Arabia’s economic diversification and will be an enabler for the automotive sector and sustainable transportation, contributing to raising non-oil GDP and increasing exports. The cluster enhances the automotive sector in Saudi Arabia by accelerating the growth of local capacity in manufacturing and sector-related research and development, and by making supply chains to serve regional and international markets more efficient.
King Salman Automotive Cluster will be a major center for the automotive sector and will have headquarters and factories for local and international companies. Notable companies include Ceer, the first Saudi electric car brand, and Lucid Motors, which opened its first international factory in KAEC in 2023. It will also host several PIF joint projects with global manufacturers, including Hyundai Motor – establishing a highly automated factory for manufacturing cars in Saudi Arabia – and a joint venture agreement with Pirelli to establish a tire factory locally.
The cluster aims to create optimal investment opportunities for the private sector to develop promising sectors in Saudi Arabia. It is expected that the cumulative GDP contribution from companies operating in King Salman Automotive Cluster will reach approximately SAR 92 billion by 2035. The cluster will also contribute to the creation of many direct and indirect jobs, support the local manufacturing sector, and increase Saudi exports to regional and global markets, which will positively impact the national balance of payments.
King Salman Automotive Cluster will leverage the supportive environment and investment incentives provided by KAEC, including its logistical infrastructure, and its proximity to a highly developed port in a vital location for global trade. These factors will provide opportunities for the local private sector and international companies to engage as partners, suppliers, and investors in the automotive sector and its related services.
The new King Salman Automotive Cluster will contribute to achieving Saudi Vision 2030, which aims to diversify the economy and achieve sustainable growth. The cluster will also be a major contributor to fulfilling the aims of the National Industrial Development and Logistics Program, which seeks to position Saudi Arabia as a leading industrial nation and a global logistics center by developing high-growth sectors locally and attracting foreign investment. This is in addition to supporting the objectives of national strategies for industry, transport and logistics.
Automotive and mobility is one of PIF’s strategic investment sectors, highlighted by partnerships with the private sector. PIF’s portfolio has several investments with the aim of enhancing the industry’s infrastructure and developing the sector’s local supply chain capacity. PIF is also contributing to enhancing local expertise and technology through joint ventures with major international manufacturers.