Riyadh, Asharq Al-Awsat—Standard & Poor’s has upgraded Saudi Arabia’s long-term sovereign rating outlook from “stable” to “positive” following a similar move by Fitch in March.
S & P’s new rating outlook for Saudi Arabia was issued just one day after Saudi finance minister Ibrahim Al-Assaf criticized international forecasts of the kingdom’s growth rates, saying they are too low.
“The International Monetary Fund (IMF) has forecast growth in the kingdom this year to be at 4.4%. We disagree and expect growth to be higher,” he told an economic forum.
In a statement to the Saudi Press Agency (SPA), the finance minister emphasized that the positive evaluations issued by the world’s largest credit rating agencies confirm confidence in the strength and durability of the Saudi economy.
He added that the rating outlook upgrades demonstrate the wise economic policies that have been pursued by the kingdom in terms of implementing the directives of the Custodian of the Two Holy Mosques, King Abdullah bin Abdulaziz.
A source within S&P informed Asharq Al-Awsat that the decision to raise Saudi Arabia’s credit rating outlook was made before the minister of finance’s criticism of international credit rating agencies.
“The rating is based on special standards that the agency uses. The statements made by the Saudi finance minister had no effect on the [country’s] new rating,” the source said.
In an official statement, S&P praised Saudi Arabia’s efforts to develop and diversify its economy leading to rapid growth.
“Growth fundamentals are strengthening in Saudi Arabia,” the company said in a statement. “The economy has expanded strongly and steadily.”
Fahad Al-Mubarak, the governor of the Saudi Arabian Monetary Agency (SAMA), emphasized that the S&P outlook is well deserved and reflects the government’s policies to promote the welfare of all citizens by investing heavily in national infrastructure.
He said: “Saudi Arabia’s successful and balanced monetary policy, its ability to monitor financial institutions, and the careful management of financial reserves contributed to the stability and development of the financial sector.”
Saudi economic expert Dr. Salim Bajaja informed Asharq Al-Awsat that the new rating highlights the strength of the Saudi economy and the government’s efforts to implement the right monetary and economic policies.
He said: “There is nothing to worry about in the future because the monetary and economic policies will further develop and bring prosperity to the Saudi economy.”
Standard & Poor’s also affirmed the long-term and short-term local currency sovereign credit ratings at AA–/A-1+. The transfer and convertibility (T&C) assessment for Saudi Arabia remains unchanged at AA+.