Fitch kept Saudi Arabia's credit rating at "A", but returned the outlook to "stable" from "negative", which reflects the return of improvement to the joints of the local economy and its public finances.
The agency said in a report today, Thursday, that today's review reflects the potential for a slight deterioration in the main sovereign balance sheet measures compared to the time of the previous review, which showed a clear deterioration at the time.
She stated that the remarkable improvement in oil prices, and the government's continued commitment to controlling public finances, prompted it to adjust the future outlook to stable from negative.
Oil prices, the main source of income for the Kingdom, have improved from an average of $60 three months ago to $74 at present for a barrel of Brent, amid expectations that demand for crude will continue to improve globally.
But Fitch indicated that it continues to expect government debt from GDP to rise, and sovereign net foreign assets to decline in the medium term, but these measures will remain much stronger than the average rating of "A".
She added, "The Saudi government will maintain large financial margins of safety. Deposits in the central bank exceed 10% of GDP, and dependence on oil is currently feasible.. But indicators of weak governance and exposure to geopolitical shocks restrict the rating."
And it expected the budget deficit to shrink to 3.3% of GDP in 2021 from 11.3% in 2020, "better than the budget target of 4.9%, assuming an average price of $63 per barrel."
"The budget will be supported by the value-added tax revenues that the government raised in July 2020 from 5% to 15%," the agency said.
She noted that the public debt is expected to reach 35% of GDP by the end of 2023, compared to an average of 33 currently.
"We expect central government deposits to decline to 11.4 percent of GDP by 2023 from 16.6 percent in 2020," he added.
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