S&P Revises Kingdom’s Credit Rating to ‘A/A-1’ with Positive Outlook

Saudi Arabia has seen a significant shift in its economic prospects following a decision by Standard & Poor's (S&P) to affirm the Kingdom’s ‘A/A-1’ credit rating, revising the outlook from stable to positive. This change reflects growing confidence in the country’s economic reforms and the diversification efforts led by Vision 2030. S&P’s revision points to the success of Saudi Arabia’s structural reforms in reducing dependency on oil revenues, strengthening fiscal stability, and boosting non-oil economic growth.

Saudi Arabia’s ambitious Vision 2030 plan is a cornerstone of the country’s ongoing transformation. It has driven investments in industries such as tourism, technology, and renewable energy, and led to numerous public-private partnerships, including the development of NEOM, the futuristic mega-city. S&P noted that these initiatives have started to bear fruit, contributing to stronger-than-expected economic performance and positioning the Kingdom for sustained growth in the long term.

The credit rating agency underscored Saudi Arabia’s resilient economic fundamentals, which have improved despite global economic headwinds. This outlook revision also follows a robust performance in the first half of the year, during which Saudi Arabia posted a budget surplus fueled by high oil prices and fiscal consolidation efforts. The fiscal discipline imposed by the Saudi government, including rationalizing subsidies and implementing fiscal reforms, has contributed to a healthier balance sheet.

In addition to the fiscal surplus, the Kingdom’s debt levels remain manageable, with the government committed to maintaining a prudent debt management strategy. According to S&P, these factors enhance the Kingdom’s overall creditworthiness and have made Saudi Arabia an attractive destination for foreign investment.

Another critical factor supporting S&P's positive revision is the stabilization of the oil market. Saudi Arabia has played a crucial role in the OPEC+ alliance, helping to maintain oil price stability through coordinated production cuts. Although the Kingdom remains heavily reliant on oil exports, the diversification measures under Vision 2030 are gradually lessening this dependency.

The positive outlook also reflects Saudi Arabia’s ongoing efforts to open up its economy to global investors. The recent expansions in the Saudi stock market, including the listing of Saudi Aramco and other large companies, have created further opportunities for foreign capital to flow into the Kingdom. S&P highlighted that these reforms would continue to attract international interest and strengthen the non-oil sectors.