S&P rating for Saudi economy positive

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Standard & Poor’s International has retained a positive rating for Saudi Arabia expecting a strong performance for the Kingdom’s economy over the next three years.

The international financial rating agency pointed out in its latest report published on Friday affirmed rating on Saudi Arabia’s rating at A-/A-2, outlook stable.

Albeit the drop in international oil prices, the positive rating underscores global confidence on measures undertaken by the Kingdom’s government within the ‘Saudi Vision 2030’ plan.

According to S&P expectation, both Saudi Arabia’s external position and government budget will remain strong during the three-year period between 2017 -2020, and oil production is to remain close to its current levels of 10 million barrels per day (bpd).

The agency said it expects the oil sector contribution to the Kingdom's actual economic growth to stabilize significantly in 2017 and 2018. “In terms of Saudi riyal peg to the US dollar, we perceive a limited flexibility in monetary policy,” it stated.

The rating comes as Saudi Arabia is preparing to sell as much as 5 percent of the oil giant Saudi Aramco in an IPO with listings on both local and international stock exchanges, setting up the world’s biggest sovereign wealth fund.

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