Fitch Ratings said Monday that it affirmed Saudi Arabia’s long-term foreign-currency issuer default rating at ‘A+’ with a stable outlook.
The rating agency said Saudi Arabia’s rating reflects its strong fiscal and external balance sheets.
However, the country’s dependence on oil revenues, low World Bank governance indicators and vulnerability to geopolitical shocks remain relative weaknesses, it added.
“Nonetheless, governance is improving with social and economic reforms and efforts to bolster effectiveness across government institutions,” it said in a statement.
The agency said foreign reserves, excluding gold, declined to $437 billion in 2023 due to lower oil revenue and high imports.
Fitch said it estimates reserves declining to an average of $420 billion during 2024-2025 as the current account surplus narrows on the assumption of lower oil revenue.
“Oil dependence remains a rating weakness. Oil revenue will account for around 60% of total budget revenue in 2024-2025 and oil GDP 30% of total nominal GDP,” said the statement.
The agency noted that Saudi Arabia’s fiscal break-even oil price for its budget has risen in recent years, and it is expected to remain above $90 per barrel in 2024 before falling to $85 per barrel in 2025.
Source: www.aa.com.tr