Fitch maintains Saudi Arabia's A+ credit rating, but how secure is it?
The kingdom's oil dependence, World Bank governance indicators and vulnerability to geopolitical shocks have improved but remain weaknesses, the ratings agency noted.
Ratings agency Fitch has affirmed Saudi Arabia’s long-term foreign-currency rating at “A+” with a stable outlook, though factors largely outside the kingdom's control such as sustained low oil prices, increased US-China tensions and a flare-up between Israel and Iran could derail the Gulf country's efforts to strengthen its economy, experts told Al-Monitor.
Fitch’s verdict
Fitch's ratings range from its highest of “AAA” to “D,” the lowest. Fitch said in a statement that one of the main reasons it reaffirmed Saudi Arabia’s rating was the kingdom’s balance sheet strength, with the government debt-to-GDP ratio and sovereign net foreign assets considerably stronger than both “A” and “AA” medians.
“Oil dependence, World Bank governance indicators and vulnerability to geopolitical shocks have improved but remain weaknesses,” Fitch said in its update issued on Friday evening. “Deep and broad social and economic reforms implemented under Vision 2030 are diversifying economic activity, albeit at meaningful cost to the balance sheets.”
