Moody’s credit rating agency raised Saudi Arabia’s credit rating to “AA3” from “A1”, citing the country’s efforts to diversify its economy away from oil.
The Kingdom, the world’s largest oil exporter, is investing billions of dollars to achieve its “Vision 2030” plan, which focuses on reducing its dependence on oil and spending more on infrastructure to boost sectors such as tourism, sports and manufacturing industries.
Saudi Arabia is also working to attract more foreign investment to ensure its ambitious plans remain on track.
Last month, Saudi Investment Minister Khalid Al-Falih sought to reassure investors at a conference in Riyadh that Saudi Arabia remains a thriving center for investment, despite a year marked by regional conflict.
With lower oil prices and lower production, government profits have declined, and as a result, the Kingdom is reconsidering some projects, which means that some projects will be postponed or reduced, while other projects will receive greater priority.
“Continued progress would, over time, further reduce Saudi Arabia’s exposure to oil market developments and the long-term carbon transition,” Moody’s said in a statement.
The agency also revised its outlook for the country from positive to stable, noting the uncertainty regarding global economic conditions and oil market developments.
Financial planning
The agency praised the financial planning undertaken by the Kingdom’s government within the framework of the fiscal space, and its commitment to prioritizing spending and raising its efficiency, in addition to the ongoing efforts made by the government and its continued investment in available financial resources to diversify the economic base through transformational spending, which supports the sustainable development of the non-oil economy in the Kingdom. Maintaining a strong financial position.
In its report, the agency explained that, based on this planning and commitment, it expected a relatively stable fiscal deficit, which could reach between 2% and 3% of GDP.
Moody’s expected that the non-oil GDP of the private sector in Saudi Arabia will grow by a rate ranging between 4% and 5% in the coming years, which is considered among the highest rates in the Gulf Cooperation Council region, an indication of continued progress in economic diversification, which will reduce the connection of the Kingdom’s economy to developments. Oil markets.
Last September, Standard & Poor’s revised its outlook for Saudi Arabia from stable to positive, against the backdrop of expectations of strong non-oil economic growth and economic flexibility.
It is noteworthy that the Kingdom has obtained, during the current and past years, a number of upgrades in its credit rating from international agencies, which comes as a reflection of its continued efforts for economic transformation in light of the structural reforms followed, and the adoption of financial policies that contribute to maintaining financial sustainability, and enhance the efficiency, strength and durability of financial planning. The financial center of the Kingdom.
