Fitch affirms Saudi Arabia’s rating at ‘A’ with stable outlook

Fitch Ratings affirmed Saudi Arabia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at “A” with a stable outlook.

The rating reflects the Kingdom’s financial strength supported by strong fiscal and external balance sheets, including exceptionally high international reserves and low government debt, it said in a statement on Thursday.

Fitch expects the government budget deficit to rise by about 12% of GDP in 2020. However, oil revenue will decline by nearly 41%, with oil price averaging $35 per barrel.

Recovery in oil prices to $45 a barrel, an easing of the coronavirus pandemic and restrained spending growth is likely to reduce the deficit to about 7% of GDP in 2021.

In addition, Fitch said the Public Investment Fund (PIF) may be in a position to support growth and offset the impact of government austerity through its domestic investments.

In March, S&P Global affirmed Saudi Arabia’s sovereign credit ratings at ‘A-/A-2’ with a stable outlook,