The international credit rating agency Fitch confirmed the positive future directions of the financial policies that the Kingdom of Saudi Arabia seeks to pursue as an extension of the structural measures and reforms taken during the past five years in accordance with the objectives of the Kingdom's Vision 2030.
In a statement published on Tuesday, the agency hailed the kingdom's pre-budget statement (PBS) for 2022, which highlighted the government’s commitment to fiscal consolidation, with support for the economy set to come increasingly from outside the budget.
The PBS targets a fiscal reserve at the Saudi Central Bank (SAMA) of 350 billion riyals in 2022 (around 11 percent of GDP by Fitch’s estimate) and expects it to increase in the medium term.
The authorities had previously forecast it to plateau at a lower level of 265 billion riyals in 2022-2023.
Maintaining a substantial fiscal reserve is supportive of the kingdom’s rating, as it provides greater flexibility to smooth public financing needs in light of volatile oil revenues, the agency noted.
