Riyadh — Moody’s, The International Credit Rating Agency,” has updated its credit rating for Saudi Arabia, affirming its A1 status for the Kingdom. The agency also changed the negative outlook in its June 2021 rating to a stable outlook.
The agency predicted the Saudi economy would return to positive growth in 2021 (A1 Status); with the current account level returning to surplus as the fiscal deficit shrinks in 2021.
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Moody’s also endorsed the effectiveness of the Kingdom’s fiscal management; as evidenced in the policy responses during periods of fluctuating oil prices.
The agency noted that one of the critical pillars of the change was the Government’s commitment to medium-term fiscal reforms. These include the budgetary Sustainability Programme to enhance fiscal discipline, improve public finance management; and rebuild budgetary buffers by adopting fiscal rules and transitioning to a multi-year budgeting process.
The agency expects Saudi Arabia’s fiscal deficit for the fiscal year 2021 to decrease to (2.5%) from (11.2%) for the year 2020; A reduction in expenditures by 6 percent in the year 2021 and a further 6 percent in the year 2022.
In addition, the agency commented on the Kingdom’s strength in the oil market displayed in its capacity; to produce oil at the lowest costs in the world compared with other exporting countries. Such advantage supports the Kingdom’s economic resilience in the environment of low oil prices.