Fitch Ratings has confirmed Saudi Arabia's long-term foreign-currency issuer default rating at 'A+' with a stable outlook, reflecting the Kingdom's strong fiscal position and substantial financial reserves. The agency's latest report emphasizes that Saudi Arabia's credit profile is bolstered by government debt and sovereign net foreign assets that significantly exceed the averages for similarly rated countries. This robust financial standing is complemented by substantial fiscal buffers, which have allowed the Kingdom to navigate regional geopolitical developments with relative ease. The resilience of non-oil economic activity and prudent fiscal management further underpin this positive assessment.
The report also highlights the soundness of Saudi Arabia's banking sector, characterized by strong capital levels and low non-performing loans, with no requirement for central bank support during recent regional tensions. Fitch projects a moderation in real GDP growth to 0.6% in 2026, followed by a rebound in 2027, driven by the normalization of maritime traffic through the Strait of Hormuz and increased oil and petrochemical production. The phased rollout of the Kingdom's giga-projects, ongoing Public Investment Fund expenditures, and recovering business confidence are expected to support this growth trajectory.
Additionally, Fitch underscores Saudi Arabia's healthy external balance sheet, with international reserves projected to cover approximately 11.6 months of current external payments by 2026, well above the median for similarly rated sovereigns. The agency notes that the Kingdom's sovereign net foreign assets will remain a significant credit strength in the coming years, alongside a resilient and well-capitalized banking sector that benefits from strong deposit growth. Improvements in governance and institutional strength continue to enhance the Kingdom's economic diversification efforts, further solidifying its creditworthiness.
The report also highlights the soundness of Saudi Arabia's banking sector, characterized by strong capital levels and low non-performing loans, with no requirement for central bank support during recent regional tensions. Fitch projects a moderation in real GDP growth to 0.6% in 2026, followed by a rebound in 2027, driven by the normalization of maritime traffic through the Strait of Hormuz and increased oil and petrochemical production. The phased rollout of the Kingdom's giga-projects, ongoing Public Investment Fund expenditures, and recovering business confidence are expected to support this growth trajectory.
Additionally, Fitch underscores Saudi Arabia's healthy external balance sheet, with international reserves projected to cover approximately 11.6 months of current external payments by 2026, well above the median for similarly rated sovereigns. The agency notes that the Kingdom's sovereign net foreign assets will remain a significant credit strength in the coming years, alongside a resilient and well-capitalized banking sector that benefits from strong deposit growth. Improvements in governance and institutional strength continue to enhance the Kingdom's economic diversification efforts, further solidifying its creditworthiness.
Source: Saudi Gazette
