S&P Global has raised Saudi Arabia’s sovereign rating to “A/A-1”, attributing it to the country’s recent reform efforts and its economic diversification strategy aimed at boosting non-oil sectors and reducing dependence on oil revenues. According to S&P Global, Saudi Arabia’s economy has shown structural improvements, including in fiscal and debt management, as a result of its significant reform momentum. The rating agency has indicated that it may upgrade the country’s rating further if there is continued progress on institutional reforms, strong per capita economic growth, and fiscal consolidation.
Moody’s has also upgraded its outlook on Saudi Arabia to positive, citing the country’s efforts to implement structural reforms that reduce reliance on oil and gas revenues. Despite the impact of the war in Ukraine on global food and fuel prices, inflation in Saudi Arabia has remained largely under control, with supply-side price caps and the peg to the dollar being contributing factors. Saudi Arabia’s Vision 2030 plan, which aims to diversify its economy and create jobs, is being supported by the country’s sovereign wealth fund, the Public Investment Fund, which is investing heavily in new cities and infrastructure projects.