Saudi Arabia’s low debt and robust balance sheet are among its key credit strengths according to a report from Moody’s, the credit ratings agency.
A large stock of proved hydrocarbon reserves with low extraction costs and prudent financial system regulation also support the sovereign credit profile, it said.
But significant challenges remain for the country that has been hit by the double blow of the pandemic at a time of weak oil prices.
“The Saudi government has made some initial progress in its ambitious and comprehensive reform plans to diversify fiscal revenue streams and the economy away from hydrocarbons,” said Alexander Perjessy, a Moody’s vice president. “However, their full implementation will be challenging and their positive impact will only be felt over the longer term.” Still, the economy is expected to grow at an average rate of around 3 percent during 2021-24.