Moody’s Ratings upgraded Saudi Arabia’s credit rating to “Aa3” in local and foreign currency with a stable outlook. This marks significant progress in the Kingdom’s ongoing economic diversification and non-oil sector growth. These advancements are expected to reduce Saudi Arabia’s reliance on oil markets and limit economic risks related to long-term carbon transition.
The agency praised Saudi Arabia’s fiscal planning, noting its focus on expenditure prioritization and spending efficiency. The Kingdom’s strategic use of fiscal resources to transform its economic base supports non-oil growth and sustains a strong financial position. Moody’s projects a relatively stable fiscal deficit of 2%-3% of GDP, driven by disciplined financial planning.
Private Sector Growth Leads Gulf Region
Experts expect Saudi Arabia’s non-oil private sector GDP to grow by 4-5% in the coming years, outpacing other Gulf countries. This robust growth reflects the Kingdom’s success in reducing oil dependency through structural reforms and transformative investments. These efforts align with fiscal policies that ensure financial sustainability and enhance planning efficiency.
Historic Upgrade from Moody’s
This is the first time Moody’s has upgraded Saudi Arabia’s sovereign rating since it began assessing the Kingdom in 2016. The “Aa3” rating places Saudi Arabia above Fitch Ratings and S&P Global Ratings, underlining its improved creditworthiness. Moody’s emphasized that sustained diversification momentum will continue reducing exposure to oil market volatility.
While Saudi Arabia faces challenges like slower economic growth and projected fiscal deficits, its non-oil sector remains a beacon of resilience. The Kingdom’s achievements highlight its commitment to economic transformation and long-term financial stability.
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