S&P Global Ratings has upgraded Saudi Arabia’s outlook from stable to positive, affirming its ‘A/A-1’ long- and short-term credit ratings.
The positive outlook stems from Saudi Arabia’s commitment to Vision 2030, which aims to diversify the economy through substantial investments in various sectors, notably tourism. Efforts to attract international visitors and enhance the Kingdom’s tourism appeal are expected to drive significant growth in this sector, contributing to economic diversification and new revenue streams.
Despite these advancements, the hydrocarbon sector remains a cornerstone of Saudi Arabia’s economy, with Aramco playing a crucial role. However, ongoing progress in non-oil sectors, including tourism, is anticipated to gradually balance the economic structure and reduce oil dependency.
S&P notes that successful implementation of Vision 2030 could result in an upgrade of Saudi Arabia’s ratings, provided these reforms lead to steady GDP per capita growth and improved economic performance in non-oil sectors.
The Public Investment Fund (PIF) is central to financing Vision 2030 initiatives, aiming to increase its assets under management to $1 trillion by 2025. This financial support is expected to boost sectors like tourism, aiding overall economic diversification.