In a recent report on the performance of the Saudi economy, the agency said the Kingdom had a strong budget supported by moderate debt levels and large financial reserves, in addition to great economic flexibility supported by effective policies and proven oil reserves at low extraction costs. .
The report says the government has shown increasing effectiveness of its fiscal policy by wisely coping with the oil price shock in 2020 and the Kingdom’s positive future prospects, which depend on the diversification of the economy.
Moody’s confirmed the Kingdom’s credit rating at A1 last March, with an outlook revised from “stable” to “positive”.
It should be noted that Saudi Arabia achieved for the first time in a decade a budget surplus in the year 2022, worth 103.9 billion riyals (27.7 billion dollars), benefiting the significant increase in oil revenues.
The international rating agency has predicted that the government’s balance sheet will continue to improve over the next few years and expects the Kingdom’s financial situation to be balanced in 2023 and 2024.
Moody’s has built its assumptions on an oil price of $85 per barrel in 2023 and $83 per barrel in 2024, and bases its assumptions on an oil price between $50 and $70 per barrel in the medium term.
According to Moody’s, the public debt burden in the Kingdom has decreased to less than 25% of GDP in 2023, and it also expects it to decrease to around 23% of GDP on average in 2024 and 2025.
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