Skip to content Skip to Search
Skip navigation

Fitch affirms Saudi rating on its robust balance sheet

Saudi Arabia is evaluating 1,200 sites to find the best ones for renewable projects Reuters/Faisal al Nasser
Despite renewable projects such as the solar plant in Uyayna, north of Riyadh, Saudi is still heavily oil-reliant and Fitch expects a budget deficit of 2.3 percent of GDP in 2024

Fitch Ratings has maintained Saudi Arabia’s rating at “A+”, supported by the kingdom’s robust fiscal and external balance sheets, including stronger debt-to-GDP ratio and sovereign net foreign assets.

The affirmation is supported by significant fiscal buffers and other public sector assets. This reflects improved governance through ongoing social and economic reforms and efforts to enhance efficiency across government institutions.

“Oil dependence, low World Bank governance indicators and vulnerability to geopolitical shocks remain relative weaknesses,” the ratings agency said.

The gross government debt-to-GDP ratio rose to 26.5 percent of the estimated GDP in 2023 but remained low.

“We forecast that government debt/GDP will increase to 28 percent in 2024 and 30 percent in 2025. This assumes that Brent crude oil prices average $80 per barrel in 2024 and $70 per barrel in 2025, contributing to budget deficits and constraining nominal GDP.”

Fitch expects a budget deficit of 2.3 percent of GDP in 2024, slightly exceeding the 1.9 percent target. 

“We expect spending 3.5 percent above budget, at SAR1.3 trillion on higher capital expenditure and procurement. Revenue will be supported by performance-related dividends from Aramco.”

The budget deficit is forecast at 2.8 percent of GDP in 2025, as spending is in line with budget plans, lower oil prices and higher oil production of 10 million barrels per day.”

Last month, the Saudi energy ministry asked the world’s largest oil company Saudi Aramco, to ditch a plan to ramp up its maximum sustainable production capacity from 12 million barrels per day (bpd) to 13 million bpd by 2027.

Despite oil dependence being a ratings weakness, crude revenue is projected to be about 60 percent of total budget revenue in 2024-25.

While the fiscal break-even oil price has risen in recent years, Fitch anticipates prices to stay above $90 per barrel in 2024 before declining to $85 in 2025.

Latest articles

UK Prime Minister Rishi Sunak said the pledge ' sets a precedent for global standards on AI safety'

UAE joins AI safety pledge at UK-South Korea summit

Two artificial intelligence companies from the UAE have signed up to a new AI safety pledge and have committed to safe development of the technology. Abu Dhabi’s Technology Innovation Institute and G42 are among 16 names on the safety pledge that also includes Amazon, Google, IBM, Meta, Microsoft, OpenAI and Samsung. The announcement was made […]

Bruno Le Maire said France was also ready to help the UAE develop its own nuclear power plants

France ‘open’ to UAE investing in its nuclear plants

The French government is open to the UAE investing in the country’s nuclear power sector, its economy minister has said. Bruno Le Maire spoke to journalists in Abu Dhabi ahead of talks with Sultan Al Jaber, the UAE minister of industry and advanced technology, and Khaldoon Al Mubarak, chief executive of investment fund Mubadala and […]

Dhahran is home to the King Abdulaziz Center for World Culture. Retal will build almost 2,000 homes in the city

Retal wins $770m contract to build in Dhahran

The Saudi builder Retal has signed a SAR2.9 billion ($770 million) contract to design and build nearly 2,000 residential units in Dhahran, Eastern Province, for the giga-project developer Roshn.  Retal “will develop and design the detailed master plan, design and execute the infrastructure, landscape, construct 1,962 residential units and public amenities building in Aldanah project,” […]

GACA president Abdulaziz Al-Duailej said licences would be announced soon for more low-cost flights from regional Saudi airports

More low-cost airline routes planned for Saudi Arabia

Plans to privatise domestic airports have been announced by Saudi Arabia as part of an aviation expansion strategy, which includes imminent licences for more low-cost airline routes, the kingdom’s civil aviation authority said this week.  The General Authority of Civil Aviation has signed an agreement with a consortium led by the Turkish airport operator TAV […]