S&P Global Ratings has revised Saudi Arabia’s forecast from stable to positive, highlighting the nation’s strong non-oil growth prospects and economic resilience.
The agency noted that the Saudi government’s potential for further reforms and investments is expected to boost the non-oil economy. This revised outlook also reflects Saudi Arabia’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 leading oil exporter globally, has initiated an economic transformation plan dubbed Vision 2030 to reduce its dependence on oil for economic growth. S&P believes that the successful implementation of Vision 2030 initiatives will sustain robust non-oil growth in the medium term.
Despite this shift, the hydrocarbon sector and national oil company Aramco will continue to be significant contributors to the kingdom’s oil-driven economy.
Inflation in Saudi Arabia remains lower than global levels, and S&P anticipates that it will stay steady, with interest rates moving in line with U.S. Federal Reserve rates.
S&P has also affirmed Saudi Arabia’s ratings at “A/A-1.”