Prime Highlight
- Fitch Ratings has affirmed Saudi Arabia’s sovereign credit rating at A+ with a stable outlook, highlighting its robust fiscal position and strong external balance sheet.
- The Kingdom’s economic reforms under Vision 2030 and solid fiscal buffers are seen as key factors supporting financial stability despite lower oil prices.
Key Facts
- Saudi Arabia’s foreign reserves are expected to cover 11.6 months of external payments in 2026, significantly higher than the peer median of 1.9 months.
- The fiscal deficit is projected to shrink to 3.6% of GDP by 2027, while GDP growth is expected at 4.8% in 2026, supported by reforms and strong non-oil sector performance.
Background
Fitch Ratings has affirmed Saudi Arabia’s sovereign credit rating at A+ with a stable outlook, pointing to the Kingdom’s strong fiscal position and solid external balance sheet as key strengths.
In its latest report, the rating agency said Saudi Arabia continues to benefit from large sovereign net foreign assets and sizable fiscal buffers, including government deposits and other public-sector holdings. On several balance-sheet metrics, the Kingdom’s strengths position it significantly ahead of peers rated ‘A’ and ‘AA’.
The rating decision comes as Saudi Arabia manages the impact of lower oil prices while pressing ahead with its economic diversification strategy under Vision 2030. Fitch said oil dependence and exposure to geopolitical risks have improved but remain areas of weakness. At the same time, it noted that deep social and economic reforms are broadening economic activity, although they come at a cost to public balance sheets.
Fitch expects Saudi Arabia’s foreign reserves to cover about 11.6 months of current external payments in 2026, far higher than the peer median of 1.9 months. Sovereign net foreign assets are forecast to decline slightly due to higher borrowing but remain a major credit strength at 41.2% of GDP by end-2026.
The agency anticipates that the current account deficit will widen to 4.3% of GDP in 2026, up from an estimated 3% in 2025, mainly because strong domestic spending drives higher imports. It expects the deficit to shrink in 2027 as oil exports rise and more tourists visit.
Saudi Arabia’s fiscal deficit is forecast to shrink to 3.6% of GDP by 2027 after reaching an estimated 5% in 2025. Fitch said higher oil production, steady non-oil revenue growth, and controlled spending should support this improvement.
Economic growth stays strong. GDP is expected to grow by 4.8% in 2026, after rising 4.6% in 2025. Fitch said that reforms, government spending and strong consumer demand are helping the non-oil sector.
The agency added that stronger non-oil revenue growth, continued reforms, or higher oil prices could support a future upgrade, while weaker public finances or rising geopolitical tensions could pose risks.
