Saudi Press

Saudi Arabia and the world
Friday, May 09, 2025

Saudi Arabia could successfully reduce fiscal reliance on hydrocarbons over time: Moody’s  

Saudi Arabia could successfully reduce fiscal reliance on hydrocarbons over time: Moody’s  

Saudi Arabia’s recent financial performance and the wide range of economic diversification programs could help the country reduce its fiscal reliance on hydrocarbons over time, credit rating agency Moody’s Investors Services said in its latest note.
Affirming a positive economic outlook, Moody’s noted that the Kingdom’s credit strengths include its robust government balance sheet, underpinned by moderate debt levels and large fiscal reserve buffers.

On March 17, Moody’s changed the outlook on the Saudi government to positive from stable and affirmed its long-term issuer and senior unsecured ratings at A1. The rating agency kept Saudi Arabia’s local currency and foreign currency country ceilings unchanged at Aa2.

“Saudi Arabia’s positive outlook reflects the increasing likelihood that broad-based structural reforms and investments in a wide range of diversification projects will help reduce significantly the sovereign’s economic and fiscal reliance on hydrocarbons over time,” said Christian Fang, vice president-senior analyst at Moody’s.

Diversifying its economy is one of the main agendas of Vision 2030, and the Kingdom is now placing itself as a global tourism hub, along with catalyzing its efforts to strengthen other sectors like logistics, technology, and mining.

Moody’s further noted that policy effectiveness and the Kingdom’s large stock of proved hydrocarbon reserves with low extraction costs are also supporting the country’s high economic resiliency.

Moody’s expects the Saudi government’s balance sheet to continue to improve in the next few years, based on an oil price assumption of around $85 per barrel in 2023 and $83 per barrel in 2024, before declining to the $50-$70 per barrel range in the medium term.

Saudi Arabia posted a fiscal surplus of 2.5 percent of the gross domestic product in 2022, against a deficit of 2.3 percent of GDP in 2022. In 2022, government revenues also rose by 31 percent year-on-year to SR1.26 trillion ($335.6 billion).

According to Moody’s, some of the credit challenges faced by Saudi Arabia include high economic fiscal exposure to declines in global oil demand prices.

Saudi Arabia could also face credit challenges in the long term due to risks stemming from the global transition to a lower-carbon economy.

“Geopolitical risks, mainly stemming from long-standing tensions with Iran, also weigh on its credit profile,” said Moody’s in the report.

The agency added that Saudi Arabia’s government debt burden is expected to decline to less than 25 percent of GDP in 2023 and around 23 percent of GDP on average in 2024-25.
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Common Sense Returns to Britain's Legal System: UK Supreme Court Declares a Woman Is… a Woman
Warren Buffett to Step Down as Berkshire CEO After Nearly 60 Years
Trump Shares AI-Generated Image of Himself as… Pope, Prompting Outrage Reaction
Amazon Launches Satellite Internet Service Amidst Competition with SpaceX
The Rush to the White Gold: Global Investment Surge in Natural Hydrogen Exploration
Trump Administration Removes National Security Adviser Mike Waltz Amid Signal Chat Controversy
Liverpool Clinches Record-Equalling 20th English League Title Under Arne Slot
Massive Explosion at Iran's Bandar Abbas Port Linked to Suspicious Chemical Shipments
Pope Francis Laid to Rest in Rome as World Leaders Attend Funeral
Not Child’s Play: How Competitive Gaming Became a Global Economic Empire
California Surpasses Japan to Become the World’s Fourth-Largest Economy
Former U.S. Congressman George Santos sentenced to eighty-seven months for wide-ranging fraud
Israel Considers Limited Strikes on Iran's Nuclear Facilities Amid Diplomatic Efforts
Saudi Arabia Offers Max Verstappen Unprecedented Deal to Join Aston Martin
Global Pistachio Shortage Amid Rising Demand for 'Dubai Chocolate'
IMF Predicts No Global Recession Amid Trade Tensions
Worldwide Markets Decline as U.S.-China Trade Frictions Intensify
OpenAI Lands Unprecedented $40 Billion Investment
Removing the Political Adversary is Dismantling What's Remaining of Turkey's Economy.
Ex-FIFA President and French Football Icon Acquitted of Corruption Allegations
White House Investigates Security Breach After Journalist Accidentally Added to Secret Yemen Strike Chat
Volunteers in Jeddah Ensure No One Goes Hungry During Ramadan Iftar
New Restaurant Opens in Makkah's Iconic Clock Tower for Ramadan Iftar
Saudi Arabia's Project Masam Removes 552 Houthi Mines in Yemen
Saudi Arabia Fines Over 400 Foreign Trucks for Regulatory Violations
Saudi National Campaign for Charitable Work Reports Significant Donations in Ramadan
Historic Al-Hosn Al-Asfal Mosque Restored in Asir as Part of National Heritage Initiative
KSrelief Expands Humanitarian Efforts in Syria, Sudan, and Lebanon
Saudi Arabia Advocates for Global Water Cooperation at Forum
Madinah Governor Tours Islamic Arts Biennale in Jeddah
Saudi Foreign Minister in Cairo to Lead Meeting on Gaza Developments
Recognition of Saudi and Pakistani Entrepreneurs at Riyadh Ceremony
UAE Announces $1.4 Trillion Investment Plan in the United States
Saudi Arabia Innovates in Soil Quality and Water Conservation
Governor of Taif Engages with Rose and Aromatic Plants Cooperative
Saudi Food and Drug Authority Enhances Preparations for Hajj Season
Saudi Arabia Distributes Aid to Yemen and Romania
Restoration of Historic Al-Qalaah Mosque in Riyadh Underlines Heritage Preservation Efforts
Saudi Arabia Arrests Over 25,000 for Immigration Violations in One Week
UAE’s ADQ and Energy Capital Partners Announce $25 Billion Energy Venture in the U.S.
KSrelief Launches Extensive Ramadan Food Aid Initiative
Ramadan Celebrations Revitalize Historic Jeddah
Makkah Authorities Urge Worshippers to Follow Crowd Management Guidelines
Direct Flights Between Dammam and Damascus Reestablished for Syrian Residents
Saudi Main Index Rises to Close at 11,760 Amid Mixed Market Performance
Moroccan Prime Minister Aziz Akhannouch Visits Prophet's Mosque in Madinah
Cultural Development Fund Hosts Third Annual Storytellers Event in Riyadh
Investment Surge in Fintech, Gaming, and Health Care Across MENA Region
Surging Prices for Religious Tourism in Saudi Arabia Amid Ramadan Rush
Middle Eastern Airlines’ Fleet Projected to Surge Above Global Growth Rates
×