Riyadh- A decline in Saudi Arabia’s first quarter budget deficit highlights the positive fiscal impact of higher oil prices on the country, Fitch Ratings said on Tuesday.
The agency expects that the fiscal deficit will continue to fall on the back of higher oil prices and a partial implementation of government reform measures. “This should contain the deterioration of Saudi Arabia’s balance sheet,” it said.
Saudi Finance Ministry has earlier said that the basis of the Saudi economy remain strong as the Kingdom’s balance sheet remains strong, with SAMA’s FX assets estimated at 84 percent of gross domestic product (GDP), the third-largest in GDP terms globally.
Saudi economy is considered one of the world’s most important economies that has been given a “stable” outlook by international rating agencies despite sharp declines in oil prices over the past two years.
The high reliability of international rating agencies reflects the extent to which these agencies are confident in the Kingdom’s ability to move beyond the oil, a vital transition stipulated by the Vision 2030.