Moody’s has projected the economy of Saudi Arabia to post growth rate of around 3.9 percent from 2022 to 2026.
The credit rating agency has issued a report elaborating on Saudi Arabia’s credit profile in terms of economic strength, institutional and governance strength, fiscal strength, and susceptibility to events’ risks with the ability to avoid or minimize their impact.
The report emphasized that Saudi Arabia’s credit strengths are derived from its robust government balance sheet, underpinned by moderate debt levels and substantial fiscal reserve buffers, in addition to large stock of proven hydrocarbon reserves with low extraction costs and prudently regulated financial system which strengthens its sovereign credit profile.
Moody’s mentioned the continuity of the government’s commitment to further fiscal consolidation despite elevated oil prices, the slow growth of oil production, the continuation of diversification projects with the critical mass moving into the implementation/construction phase in the next several years.
The report further said that the structural economic, legal and social reforms that the government has been implementing to improve the business environment in Saudi Arabia will begin to bear fruit in the form of higher private sector investment growth.
It is noteworthy that Moody’s updated its credit report for Saudi Arabia last month, affirming its “A1” rating for the Kingdom with a stable outlook as a result of the government’s commitment to fiscal consolidation and continuous structural measures and reforms toward long-term fiscal sustainability.