S&P Global Rating, the international credit rating agency, has confirmed the Kingdom of Saudi Arabia’s foreign and local currency sovereign credit ratings at ‘A/A-1’ with a Stable Outlook. In its latest report, the agency attributed this affirmation to the Kingdom’s ongoing economic and social reform agenda, which has bolstered its economic resilience and supported the growth of the non-oil sector and fiscal revenues.
Read more: S&P: Saudi banks will benefit from interest rate increases
The agency predicts that Saudi Arabia will experience an average GDP growth rate of 3.3 percent in the medium term, driven by increased investment in the non-oil sector and strong consumer spending. It anticipates substantial growth in construction related to the Saudi Vision 2030 projects, as well as expansion in the service sector, fueled by consumer demand and the growing female workforce. S&P also projects fiscal deficits of approximately 2 percent of GDP between 2024 and 2027.
Furthermore, S&P commends Saudi Arabia for embarking on an ambitious and rapid economic and social transformation program through the Saudi Vision 2030. As the country progresses toward 2030, the agency expects a surge in investment projects aimed at establishing new industries, including tourism, and diversifying the economy beyond its heavy reliance on the upstream hydrocarbon sector.
According to recent data from GASTAT, Saudi Arabia, which has the largest economy in the Arab world, experienced a contraction of 0.8 percent in its economy last year. This decline was primarily attributed to a significant decrease in the oil sector. However, the non-oil sector saw growth of 4.4 percent during the same period.
The General Authority for Statistics reported that the oil sector experienced a decline of 9 percent in 2023, while the government sector witnessed growth of 2.1 percent.
Moreover, the latest data from GASTAT reveals that Saudi Arabia’s gross domestic product at current prices surpassed 4 trillion Saudi riyals ($1.06 trillion) in the previous year.
For more news on the economy, click here.
