S&P's Positive Outlook: Saudi Arabia's Credit Rating Soars to A+

A Testament to Transformation

S&P Global Ratings has recently upgraded Saudi Arabia’s long-term sovereign credit rating from “A” to “A+” with a stable outlook. This significant leap in the credit rating is a testament to the country’s dynamic socioeconomic reforms and numerous efforts to diversify beyond oil dependency, including the expansion of its domestic capital markets.

Economic Projections: What Lies Ahead

According to S&P, the kingdom’s real GDP growth is projected to average an impressive 4% over the 2025 to 2028 period. However, the agency has warned that the present sensitivity to oil price fluctuations could pose challenges by potentially weakening fiscal and external stability up to 2028.

Fiscal Considerations

S&P anticipates a widening fiscal deficit, projected to reach 4.8% of GDP by the end of the year, up from an earlier estimate of 2.8% in 2024. This shift highlights the ongoing balancing act for Saudi policymakers as they navigate the intricate landscape of economic transformation while managing oil market dependencies.

Comparative Insights

Notably, Moody’s credit rating for Saudi Arabia remains at Aa3 but with a stable outlook, hinting that while optimism prevails, caution persists among international observers.

The Broader Picture

As stated in TradingView, these ratings not only reflect the current economic situation but also underscore the kingdom’s commitment to long-term strategic goals. With such ratings, Saudi Arabia is likely to attract more foreign investment, further bolstering its economic diversification strategies.

Stay tuned for more updates on Saudi Arabia’s evolving economic landscape and how it continues to shape global economic narratives.