Fitch: Anti-corruption settlements may revive Saudi state budget

Saudi Arabia's receipt of over $ 100 billion settlements from the anti-corruption crackdown will likely boost state budget, Fitch Ratings said in a report.

The full impact will depend, however, on the composition of assets seized, their end use and the impact on general investment climate.

Such settlements, if cashed in, would help curb the drawdown of government deposits at Saudi Arabian Monetary Authority (SAMA) and reduce the need for borrowing in 2018.

“However, we think the government may also choose to place a portion of proceeds in off-budget funds to finance development project spending,” Fitch added.

Some of these settlements may represent significant equity stakes in domestic companies, which would have limited weight on Fitch assessment of the Kingdom’s sovereign creditworthiness.

Saudi Arabia's 'A+' rating already reflects exceptionally high international reserves, low government debt, and significant government assets, the agency said.

“We forecast sovereign net foreign assets to fall to 75 percent of GDP in 2018, but this would still be one of the largest among Fitch-rated sovereigns”, Fitch said.

The government debt is seen rising to 17 percent of GDP and deposits at SAMA falling to 23 percent of GDP this year.