Fitch Ratings affirms Saudi Arabia’s credit rating at ‘A’

09/11/2020 Argaam


Fitch Ratings affirmed on Monday, Nov. 9, Saudi Arabia’s long-term foreign-currency issuer default rating (IDR) at ‘A’, while revising the outlook to negative from stable. The revision in outlook follows the repercussions of the coronavirus pandemic and the risk of a second wave, along with lower oil prices, which has resulted in the credit rating agencies making as many as 215 adjustments, and reducing more than 100 global ratings.

 

In its report, Fitch Ratings noted the strength and durability of the Kingdom's public finances and the flexibility of its fiscal policy, which are essential to help the country withstand economic shocks and have prompted international credit rating agencies to confirm Saudi Arabia’ rating in the past three credit rating reports.

 

Fitch had noted that Saudi Arabia’s economic downturn in 2020 is the least compared to the other G20 countries, adding that the government’s economic initiatives have contributed to mitigating the negative impact of the coronavirus pandemic.

 

According to Fitch Ratings, Saudi Arabia's 'A' IDRs also reflect the following key rating drivers:

 

The government has taken a number of structural fiscal measures this year to limit the impact of lower oil prices and the coronavirus pandemic on public finances, demonstrating its commitment to fiscal consolidation.

 

These measures have also contributed to enhancing revenues in the state's general budget, the report said, adding that the transformation program also contributed to controlling public finances, which led to an expansion of revenues.

 

The agency noted that the effective measures taken by the government to enhance transparency and diversify the economy – led by the efforts of the Public Investment Fund and the National Development Fund – contributed to supporting the investment environment in the country.

 

Fitch Ratings also confirmed that the Kingdom still possesses one of the largest sovereign assets among the countries classified with the agency, including high foreign reserves that are among the highest this year.

 

The agency said it expects government debt to reach about 35% of GDP by end-2020.

Comments {{getCommentCount()}}

Be the first to comment

loader Train
Sorry: the validity period has ended to comment on this news
Opinions expressed in the comments section do not reflect the views of Argaam. Abusive comments of any kind will be removed. Political or religious commentary will not be tolerated.