Fitch Ratings has affirmed Saudi Arabia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘A+’ with a Stable Outlook, the ratings agency said.
“Saudi Arabia’s ratings reflect its strong fiscal and external balance sheets, with government debt/GDP and sovereign net foreign assets (SNFA) considerably stronger than both the ‘A’ and ‘AA’ medians, and significant fiscal buffers in the form of deposits and other public sector assets. Oil dependence, low World Bank governance indicators and vulnerability to geopolitical shocks remain relative weaknesses. Nonetheless, governance is improving with social and economic reforms and efforts to bolster effectiveness across government institutions.”
Fitch noted that Saudi Arabia has “one of the highest reserve coverage ratios among Fitch-rated sovereigns, at 16.5 months of current external payments.”
Foreign reserves excluding gold declined moderately in 2023, to USD437 billion, as financial account outflows in the form of investments abroad outweighed the current account surplus, which narrowed to an estimated 4.5% of GDP, around USD100 billion smaller than in 2022, due to lower oil revenue and high imports.
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