Fitch Ratings affirmed Saudi Arabia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘A+’ with Stable Outlook.
In its recent report, the agency noted that the rating reflects the Kingdom's strong fiscal and external balance sheets, with government debt/GDP and Sovereign Net Foreign Assets (SNFA) significantly stronger than both the 'A' and 'AA' medians. Furthermore, it highlighted the Kingdom's significant fiscal buffers in the form of deposits and other public-sector assets.
Fitch projects that the Sovereign Net Foreign Assets (SNFA) will reach 63.7% of gross domestic product (GDP) in 2024-2025, a figure that is considerably higher than the 'A' median of 8.7% of GDP. The agency emphasized that fiscal reforms, designed to enhance the budget's resilience to oil price volatility, could positively influence the rating.
Additionally, Fitch expects robust growth in non-oil exports, with the services balance deficit projected to continue narrowing, driven by strong growth in travel.
