S&P raises rating on Saudi Arabia to ‘A/A-1’, Moody’s upgrades outlook to ‘Positive’

The Kingdom of Saudi Arabia's flag

S&P Global raised its long and short-term foreign and local currency sovereign credit ratings on Saudi Arabia to "A/A-1" , with Stable outlook., while Moody's Investors Services affirmed the Kingdom’s sovereign rating at “A1”, lifting the country's outlook to “Positive” from Stable” on March 17.

S&P Global said the rating was driven by the Kingdom's significant reforms recently and the structural improvements realized, which contributed to supporting a sustained development of the non-oil sector.

The rating agency expected moderate economic growth, averaging 2.6% in 2023-2026 with GDP/capita averaging USD 31,500 (significantly above pre-pandemic levels). It also predicted the non-oil sector to remain strong through 2026.

On the other hand, Moody’s said the government is making progress in implementing its broad-based structural reform agenda, which will support the sustainability of the economic diversification efforts over the medium and long term.

In addition, momentum is gathering behind a wide range of government-sponsored diversification projects and initiatives, which if successfully executed and, importantly, supported by private sector investment, will be the main driver of the expansion of Saudi Arabia's non-hydrocarbon sector and employment over the coming years, Moody’s added.