The world credit rating agency S&P Global Ratings updated its credit report for the Kingdom of Saudi Arabia, raising its long and short-term foreign and local currency sovereign credit ratings to 'A/A-1' with stable outlook, the Saudi Press Agency (SPA) reported today.

The agency indicated in its report that this rating upgrade is a result of the Kingdom's significant reforms efforts in recent years and its realisation of structural improvements that contributed to supporting a sustained development of the non-oil sector, in addition to improving public finance management and maintaining balanced public debt level.

The agency highlighted the strong real GDP growth of 8.7 percent in 2022, the highest among the G-20 economies. It expects moderate economic growth, averaging 2.6 percent in 2023-2026 with GDP/capita averaging US$31,500 (significantly above pre-pandemic levels).

The agency forecasts the non-oil sector to remain strong through 2026 due to service sector growth supported by the significant ongoing social reforms and female workforce participation. It also expected the continuity of fiscal surpluses through 2024 (after reaching 2.5 percent of GDP in 2022).

The report indicated that inflation in the Kingdom is relatively low compared to its peers. It expected that it will remain under control thanks to the government efforts in subsidising fuel and food, as well as the currency peg to the relatively strong U.S. dollar. &