HomeEconomyMoody’s projects Saudi economy to grow at 3.9% by 2026
By Economy Middle East
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July 20, 2022 10:44 am

Moody’s projects Saudi economy to grow at 3.9% by 2026

Supported by large fixed stock of oil reserves, stable financial system
Saudi
A man looks at central Riyadh

Global rating agency Moody’s has projected Saudi Arabia’s economy to grow at an average rate of around 3.9 percent from 2022 to 2026.

Moody’s released its annual report on an in-depth credit analysis, which shows Saudi’s credit position in terms of economic strength, institutional and governance strength, financial strength, and vulnerability to event risks with the ability to avoid or mitigate their impact, which are four main analytical factors in the agency’s sovereign credit rating methodology.

Moody’s stated in its detailed report that Saudi’s credit strengths stem from the strength of its general budget, which is supported by moderate debt levels and a large stock of financial reserves, as well as a large fixed stock of oil reserves with low extraction costs and a stable and organized financial system, all of which contribute to the strength of the Kingdom’s sovereign credit file.

The agency predicted that Saudi’s economy would grow at an average rate of about 3.9 percent from 2022 to 2026, citing factors such as the continuation of financial control despite the rise in oil prices, the slowdown in the growth of increased oil production, and the continuation of economic diversification projects, as well as Saudi’s economy effectively reaching the stages of implementation and construction in the coming years.

In addition to the Saudi government’s structural, economic, legal, and social measures and reforms to improve the business environment, will clearly contribute to increased private sector investment growth.

Moody’s last month affirmed its A1 rating for Saudi with a stable outlook on the basis of the government’s commitment to fiscal consolidation and continuous structural measures and reforms toward long-term fiscal sustainability.