Saudi Arabia has received a credit rating upgrade to A+ with a stable outlook, reflecting progress in economic reforms and capital market development. S&P Global Ratings highlighted robust non-oil sector growth and anticipated increases in oil production from 2025 as key drivers for medium-term economic prospects.
The kingdom’s National Debt Management Centre expects this improved rating to help secure better terms for international borrowing. Saudi Arabia still anticipates a fiscal deficit, projecting a shortfall of $27 billion in 2025, and plans to borrow SAR 139 billion to bridge the gap.
Real GDP growth is forecast to average 4% between 2025 and 2028, fueled by investment in construction, services, and a rise in consumer demand. Since the Vision 2030 initiative began, Saudi Arabia has completed the majority of its economic diversification goals. Ongoing infrastructure investment and evolving labor markets are seen as strengthening resilience.
The Public Investment Fund is set to inject $40 billion annually into major domestic projects. Tourism’s contribution to GDP has nearly doubled in recent years, reflecting the sector’s growing importance.
Oil prices are expected to decline to $70 per barrel over the next few years, down from $81, with reduced dividends from Saudi Aramco further impacting oil revenues. S&P predicts the fiscal deficit will widen to 4.8% of GDP this year. Despite some upward pressure on housing costs, inflation is forecast to remain modest, averaging 1.9% over the next four years, supported by price controls and the currency peg to the US dollar.