S&P Raises Saudi Outlook to 'Positive'

Standard & Poor’s credit rating agency raised its outlook for Saudi Arabia to a positive outlook from stable, Friday, citing expectations of strong growth in the non-oil sector and economic robustness.

S&P confirmed its credit rating for Saudi Arabia at A/A-1.

“The outlook for the Saudi economy is positive under the ongoing reforms, and reflects the potential for reforms and large-scale investments implemented by the Saudi government to support the development of the non-oil economy,” the agency said.

"The positive outlook reflects the assessment regarding the strong growth of the non-oil economy in Saudi Arabia and the robustness of the economy in the face of continuous fluctuations in the hydrocarbon sector, and that the review of some large infrastructure projects would serve to contain pressures on public finances in Saudi Arabia," the agency said.

“We expect continued growth in the Kingdom’s GDP from 2024 to 2027, supported by a continued increase in non-oil investments and higher consumer spending,” according to the report.

The agency also expected Saudi Arabia to see an acceleration in investments to develop new industries, such as tourism, and diversify the economy away from hydrocarbons. Current investments will stimulate consumption by the kingdom’s more than 35 million people (mostly young people) and increase production capacity for sectors such as manufacturing, logistics and mining.