Home GCC Saudi Arabia Fitch lifts Saudi Arabia’s outlook to stable as oil gives boost The ratings agency expects the Saudi budget deficit to narrow to 3.3 per cent of GDP this year by Bloomberg July 15, 2021 Fitch Ratings reaffirmed Saudi Arabia’s A sovereign rating and revised its outlook for the kingdom from negative to stable as higher oil prices give the world’s largest crude exporter a boost. The ratings agency expects the Saudi budget deficit to narrow to 3.3 per cent of gross domestic product this year — better than the 4.9 per cent targeted in the state budget, it said in a report on Thursday. It attributed its revision to “significantly higher oil prices and continued government commitment to fiscal consolidation,” and said it expected the central bank’s reserves to increase in 2022 and 2023 as the current account returns to surplus. “Higher oil prices in 2021 are nonetheless a test for reform momentum, including on the wage bill and subsidies,” the agency said. “Planned reforms in these areas may well slow.” Fitch also forecast a rise in the government debt to GDP ratio to 35 per cent by the end of 2023. Constraints on the kingdom’s rating include “oil dependence, weak governance indicators and vulnerabilities to geopolitical shocks,” the report said. Tags Economy Fitch GDP oil Saudi Arabia Stable 0 Comments You might also like Saudi Arabia’s Mawani signs four contracts worth SAR1bn Oil jumps over 2% amid further Red Sea vessel attacks GCC region M&A blazes trail as global deals decline Top marks for GCC nations in digital connectivity index