Saudi Arabia’s sovereign debt rating has been upgraded by Fitch Ratings to ‘A+’ from ‘A’, due to the country’s strong fiscal and external balance sheets, as well as significant reform momentum in recent years. The rating agency revised its estimate of the 2025 fiscal break-even oil price to $76 a barrel, up from $70 a barrel, and cautioned that oil dependence remains a rating weakness, as oil revenues are expected to account for about 60% of total government income in 2023/24. The country’s GDP expanded by 8.7% in 2022, the highest among G20 countries, as its non-oil sector and positive developments in the hydrocarbon market helped to evade the global slowdown.
Fitch expects the Public Investment Fund to moderate its external investments, and non-oil growth to slow to around 4% in 2024 and 2025, although investments in new projects pose a “medium-term risk” to the country’s balance sheet strengths.