Standard & Poor’s (S&P’s) Global Rating has affirmed Saudi Arabia’s credit rating at (A-/A-2), with a stable outlook.
It stressed that the Kingdom’s government seeks to diversify sources of non-oil income.
The stable outlook reflects S&P’s expectations regarding the Kingdom’s ability to keep a steady economic growth in the coming two years, according to Reuters.
The Saudi government will cut its spending to achieve balance in its 2023 budget, S&P’s said, expecting the Saudi government to strive to balance its public finances away from oil and gas while reducing dependence on expatriate labor.
It didn’t expect any challenges facing the Saudi foreign policy to have a significant impact on the local economy.
Saudi Aramco's acquisition of a large stake in SABIC would not directly affect the Saudi government’s financial position, it noted.
Notably, Saudi Aramco announced Wednesday it had acquired a 70 percent stake in Saudi Basic Industries Corp (SABIC), in a deal worth $69.1 billion.
The deal will take six to 12 months to complete, and there won’t be any layoffs, change in management or impact on SABIC’s balance sheet, said a senior official in SABIC.
These indicators come as Saudi Arabia aims at boosting its economy through various programs, with huge investment opportunities for local and foreign capital via projects announced by the government.
Meanwhile, it seeks to maintain the levels of economic growth in various sectors.
Jadwa Investment said earlier that the preliminary data for 2018 issued by the General Authority for Statistics indicate the Saudi economy’s growth by 2.2 percent year on year in 2018.
It said this was due to the growth in the GDP of the Kingdom’s oil sector by 2.8 percent and the non-oil sector by 2.1 percent.
