Saudi Arabia retains flexibility to adjust expenditure: Fitch

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Saudi Arabian authorities retain flexibility to adjust expenditure, particularly on investment, as they look to balance capital spending priorities and fiscal targets, said Fitch Ratings.

“This flexibility could ease the effect on Saudi Arabia’s public finances if oil prices are lower than we expect,” Fitch wrote in its recent report.

The ratings agency also indicated that large sovereign net foreign assets and significant fiscal buffers in the form of deposits and other public-sector assets remain key strengths for Saudi Arabia’s credit profile.

Fitch also expected government debt to rise to 35.3% of GDP by the end of 2026, from 29.7% at 2024-end.

“We believe contingent liabilities are rising as government-related entities (GRE) - particularly the PIF - step up borrowing, but are still dwarfed by GRE assets,” Fitch said.