S&P Global Ratings has upgraded its outlook for Saudi Arabia from stable to positive, highlighting the country’s robust non-oil growth and economic resilience.
The agency noted that this positive outlook is due to the Saudi government’s potential for further reforms and investments aimed at boosting the non-oil economy.
The upgrade is also a testament to the country’s ability to withstand volatility in the hydrocarbon sector.
“We expect to see an acceleration of investments to develop newer industries, such as tourism, and diversify the economy away from its primary reliance on the upstream hydrocarbon sector,” S&P stated.
Saudi Arabia, the world’s leading oil exporter, has launched an economic transformation plan known as Vision 2030 to reduce its dependence on oil.
S&P believes that the continued implementation of Vision 2030 will support strong non-oil growth in the medium term. However, the hydrocarbon sector and state-owned Aramco will continue to be significant contributors to the kingdom’s oil-linked economy.
Inflation in Saudi Arabia has remained relatively low compared to global levels, with S&P expecting it to stay stable and interest rates to align with the U.S. Federal Reserve.
Additionally, S&P has affirmed Saudi Arabia’s ratings at “A/A-1.”