Tuesday 21, November 2017 by Jessica Combes

S&P affirms Saudi Arabia at 'A-/A-2' with a stable outlook


S&P Global Ratings has affirmed its 'A-/A-2' unsolicited long- and short-term foreign and local currency sovereign credit ratings on the Kingdom of Saudi Arabia, with a stable outlook.

According to a statement by the ratings agency, the stable outlook is based on our expectation that the Saudi authorities will continue to take steps to consolidate public finances and maintain government liquid assets close to 100 per cent of GDP over the next two years.

S&P suggests that the risks emanating from recent shifts in Saudi Arabia's political power structures and societal norms, alongside various regional stresses, are balanced by the possibility that these structural reforms could empower Saudi citizens and make Saudi Arabia more attractive to investors over the medium term.

S&P may lower its ratings if it observes further deterioration in Saudi Arabia's public finances. Fiscal weakening could entail prolonged double-digit central government deficits as a percentage of GDP, a quicker drawdown of fiscal assets, or an unexpected materialisation of contingent liabilities.

The ratings could also come under pressure if there is a significant increase in domestic or regional political instability as a result of the increasing centralization of power.

The ratings could be raised if Saudi Arabia's economic growth prospects improved markedly beyond the agency’s current assumptions.

The next scheduled rating publication on the sovereign rating of the Kingdom of Saudi Arabia will be on or before 6 April 2018.

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