Riyadh – Saudi Arabia’s fiscal position remains strong, according to Moody’s Global Credit Research report published on Friday. The report pointed out that economic reforms executed by the kingdom will contribute in curbing the public budget deficit despite the drop in oil prices.
Moody’s A1 rating outlook is supported by the Kingdom’s strong fiscal position – the report also forecast that government’s revenue sources will become diversified, with oil and gas revenue declining to 54 percent by 2020.
Moody’s anticipated only a mild real GDP shrinkage of 0.2 percent in 2017 due to lower oil production.
This classification coincides with the Saudi Finance Ministry affirming that the country’s economy stands on solid foundation and that there is a plenty of international monetary assets at the Saudi Arabian Monetary Authority.
The high confidence of Moody’s in the Saudi economy reflects these corporations’ certainty that the Saudi economy will manage to move to the post-oil phase – as set in the Saudi Vision 2030.
In this context, the Ministry of Finance announced last week that Saudi Arabia’s Fitch outlook has moved from negative to stable, noting that the recent downgrade to the Sovereign rating was based on a quantitative, number-driven analysis.
“The fundamentals of the Saudi economy remain strong,” Finance Minister Mohammed al-Jadaan said in a statement.
“General government assets exceed the global domestic product (GDP) with 100%. Through the Saudi Vision 2030, we applied several initiatives aiming at cementing the structure of economy,” Jadaan added.
He concluded by saying that “these efforts have been made possible through strengthened governance, institutionalization of structural reforms, and enhanced transparency.”