The credit rating agency said Saudi government’s ongoing structural economic, legal and social reforms to improve business environment in the country will begin to bear fruit by way of higher private sector investment growth
Global rating agency Moody’s has projected Saudi Arabia’s economy to grow at an average rate of around 3.9 percent from 2022 to 2026.
Continuity of the Saudi government’s commitment to further fiscal consolidation despite elevated oil prices, the slow growth of oil production and the continuation of diversification projects moving into the implementation or construction phase in the next several years are among the factors cited by the agency for its medium-term growth projections for the country, SPA reported.
Moody’s also said the structural economic, legal and social reforms that the government has been implementing to improve the business environment in Saudi Arabia will begin to bear fruit by way of higher private sector investment growth.
Moody’s last month had affirmed its A1 rating for the Kingdom with a stable outlook on the basis of the government’s commitment to fiscal consolidation and continuous structural measures and reforms toward long-term fiscal sustainability.
The credit rating agency’s annual credit analysis report on Saudi Arabia elaborated on the country’s credit profile in terms of economic strength, institutions and governance strength, fiscal strength, and susceptibility to events’ risks with the ability to avoid or minimise their impact.
The report highlighted that Saudi Arabia’s credit strengths are derived from its robust government balance sheet, underpinned by moderate debt levels and substantial fiscal reserve buffers.
The report also talked about the large stock of proven hydrocarbon reserves with low extraction costs and prudently regulated financial system, which strengthen the country’s sovereign credit profile.
Source: Arabian Business
