Saudi’s financial position remains positive
02 Apr 2017
(MENAFN) Saudi Arabia’s rating and stable outlook are helped by a strong financial position, the kingdom’s large oil and gas reserves at low production costs and high levels of external liquidity.
Accordingly, credit challenges involve the economy’s high reliance on oil, a rigid government spending structure and government profits that are vulnerable to oil price volatility.
This year, GDP will reach 0.2 percent due to lower oil production, trailing the Organization of the Petroleum Exporting Countries (OPEC) deal reached in Nov.
Meanwhile, fiscal consolidation will continue, Moody’s predicts a sizeable budget deficit of 10.5 percent of GDP this year, narrowing to 9.2 percent in 2018.