In a statement, Fitch International raised Saudi Arabia’s long-term foreign currency credit rating to “A +” from “A” with a “stable” outlook.
The agency attributed this to the strong fiscal and external balances, including the debt-to-GDP ratio and the strong net foreign sovereign assets.
The agency said in a statement: “The update (credit rating) of the Kingdom reflects that its positive balance of payments, public debt-to-GDP ratio, and net foreign sovereign assets significantly outperform its (A) and (AA) ratings.”
The agency added that the modernization also implies an ongoing commitment to making gradual progress in tax, economic and administrative reforms in the Kingdom.
The agency pointed out that “dependence on oil, weak governance indicators, and vulnerability to foreign policy shocks remain the Kingdom’s weaknesses, and despite that, there are improvements in these areas.”
The agency said that Saudi revenues from oil sales are expected to reach about 60% of the total budget revenues, while the index was at 90% for 10 years.
And the agency continued: “The rating can be downgraded if the general financial situation deteriorates and the debt-to-GDP ratio rises above expectations, and a dangerous escalation in foreign policy tensions can also lead to this if it affects the main economic infrastructure.”
This article was originally published by RT.