Fitch Ratings has fixed its credit rating for Saudi Arabia at A, with a stable outlook.
According to ArabiaNet, Fitch indicated that the rating reflects the financial strength enjoyed by the Kingdom, including exceptionally high foreign reserves, and a low government debt ratio.
She explained that these factors reduce dependence on oil and geopolitical shocks.
Fitch expects the budget deficit in the Kingdom to increase to 12% of GDP (up to $ 80 billion), compared to 4.5% in 2019.
It expects oil revenues to drop by 41% if the average price of a barrel of oil reaches $ 35 a barrel, with an average production of 11.5 million barrels per day.
It also expects non-oil revenue to decline by 15% compared to last year due to the implications of the Corona virus. She also attributed this significant decline to the absence of unrefined profits that the Kingdom achieved last year from offering a stake in Aramco, anti-corruption revenues and tax adjustments.
She noted that the budget deficit will fall to 7% next year, with oil prices rising to $ 45 a barrel. And its forecasts indicate that every drop in oil production by about one million barrels per day, means an increase in the budget deficit of about 2%, and that a decrease in the average price of a barrel of oil by about $ 10 a barrel, will negatively affect the budget by 4%.
Accordingly, the impact of the Kingdom will be limited this year, especially since the production of this year has already been priced and sold, according to the report.
The agency expects the current account deficit to reach 4% of GDP in 2020, and to achieve a surplus of 1% in 2021, compared to a surplus of 6% last year.
