Fubotv earnings beat by $0.10, revenue topped estimates
Investing.com -- S&P Global Ratings has raised Saudi Arabia’s long-term sovereign credit rating to ’A+’ from ’A’, citing sustained socioeconomic and capital market reforms under Vision 2030. The short-term ’A-1’ rating was affirmed, and the outlook remains stable. The upgrade was announced on March 14, 2025.
The stable outlook is due to strong non-oil growth and developing domestic capital markets, which balance risks from rising government and external debt and debt servicing costs associated with Vision 2030 goals.
The rating upgrade reflects S&P’s view that Saudi Arabia’s ongoing social and economic transformation is supported by improving governance effectiveness and institutional settings, including deepening domestic capital markets. Institutional checks and balances have become more noticeable as Vision 2030 progresses.
Public and private investments are targeting the development of newer industries, such as tourism, manufacturing, green energy, and mining, to diversify the economy away from its primary reliance on the hydrocarbon sector. These investments are expected to boost consumption by Saudi Arabia’s largely young population of over 35 million and gradually increase the productive capacity of the economy.
However, S&P expects fiscal and external imbalances due to sensitivity to oil prices through 2028. The agency assumes that oil prices will fall to $70 per barrel over 2025-2028, from $81/bbl in 2023. The announcement of a decline in Saudi Aramco (TADAWUL:2222) dividends by one third in 2025 will further dampen oil revenue. The fiscal deficit is expected to widen to 4.8% of GDP this year, from 2.8% in 2024.
Despite these challenges, S&P projects that the government’s net asset position will gradually fall, but remain comfortably strong, at about 32% of GDP in 2028. The country is expected to remain in a net external creditor position over the next four years, despite a significant increase in external financing needs.
S&P also notes that Saudi Arabia maintains its position as the world’s largest swing oil exporter and retains a leadership role in OPEC+, enabling it to influence global oil price trends.
Beyond Vision 2030 projects, ongoing labor reforms and productivity will be key factors in growth. The country will gradually open up more employment opportunities to women, promote private sector jobs for Saudis, and further reduce Saudi unemployment.
Despite geopolitical risks, Saudi Arabia aims to expand its geopolitical footprint beyond the region while maintaining strong alliances with the U.S. and China.
Despite higher fiscal deficit forecasts relative to S&P’s previous review, the agency expects the government to maintain a comfortable net asset position. With rising imports for development projects and lower oil prices, Saudi Arabia is projected to run current account deficits of about 2% of GDP through 2028.
The government will maintain comfortable fiscal buffers despite rising government debt. S&P forecasts gross general government debt rising gradually to about 36% of GDP in 2028, from 25% in 2024.
S&P expects Saudi Arabia’s net government asset position to reduce to a still-high 32% of GDP in 2028, from around 55% estimated in 2023. In 2024, the government recorded a fiscal deficit of 2.8% of GDP.
Inflation in Saudi Arabia remains lower than in peer countries and is supported by the peg to the U.S. dollar. Despite rising housing prices and some supply pressures, inflation will stay modest at about 1.9% over the next four years, relative to 1.7% in 2024.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.