Strong non-oil activity, investment inflows support Saudi rating prospects: S&P

The Kingdom of Saudi Arabia's flag

S&P Global stated that it could upgrade Saudi Arabia’s credit rating (A+/Stable/A-1) if strong non-oil activity leads to an increase in GDP per capita, along with higher private and foreign investment inflows.

According to S&P Global report, Saudi Arabia’s GDP is expected to grow by 3.5% during 2025-2028, with an average fiscal deficit of 4.4% of GDP over the same timeframe, backed by Vision 2030 investments.

The stable outlook reflects the agency’s view that strong non-oil growth momentum and a developing local capital market help offset the risks associated with rising government and external debt, to pursue Vision 2030 goals and debt servicing costs.

It also pointed out that the Saudi banking sector is highly resilient, adding that banks are increasingly turning to external borrowing to support Vision 2030, thereby reinforcing their economic role amid growing lending activity.

S&P expects corporate sector ratings to remain largely stable, with the energy and water sectors dominating project financing and digital infrastructure gaining momentum.

Additionally, it said the Saudi insurance market is benefiting from strong growth prospects, although it faces challenges due to high market concentration and low penetration rates. The agency highlighted that 100% of the Saudi insurance companies in its portfolio are investment-grade.