Outside the Brackets

Credit Affirmations of Our Economy's Resilience

The affirmation by Fitch Ratings of the Kingdom's credit rating at 'A+' with a stable outlook reflects the strength of the Kingdom's financial position, supported by large financial reserves.

Also contributing to this high credit assessment are the Kingdom's government debt levels and net sovereign foreign assets, which are significantly stronger than the averages of countries rated in the 'A' and 'AA' categories.

The agency noted that the Saudi economy and public finances have demonstrated a high degree of resilience despite the current geopolitical situation in the region, supported by the strength of non-oil activities and the Kingdom's solid financial position.

The agency expects real GDP growth to slow to 0.6% in 2026, before rebounding in 2027, as the resumption of navigation flows through the Strait of Hormuz allows for increased oil and petrochemical production, which will contribute to a return to a growth rate of 2.9% by 2028.

This qualitative credit rating reflected the Kingdom's ability to leverage its strategic energy infrastructure to ensure the continuity of its oil exports by utilizing the East-West Pipeline as an effective operational alternative that enhanced supply flexibility through Red Sea ports and mitigated the impact of challenges facing some vital maritime routes. At the same time, this approach highlighted the Kingdom's strategic vision in diversifying oil export routes, solidifying its position as a reliable energy supplier, and boosting market and investor confidence. In this context, the agency explained that the continued flow of oil through the East-West pipeline also helped maintain production during the war period, with expectations of a gradual increase in production after the reopening of the strait to meet global demand and replenish local inventories, although the annual average production according to the agency's forecasts will be about 9 million barrels per day, lower than 2025 levels.

The assessment also reflected that the Kingdom's handling of geopolitical tensions is not limited to managing their potential impacts but extends to turning supply chain challenges into opportunities to enhance investment attractiveness and economic competitiveness by strengthening logistics infrastructure, facilitating trade and customs procedures, and diversifying routes and outlets. This was confirmed by the Saudi economy's ability to address global challenges and turn them into opportunities that support economic growth and enhance the Kingdom's position as a global economic and logistics hub. Structural reforms under Saudi Vision 2030 have also tangibly contributed to enhancing supply chain resilience in both the oil and non-oil sectors through localization of industries, diversification of trade routes, expansion of trade partnerships, and development of infrastructure and logistics services.

Amid rising geopolitical risks and associated uncertainty in the global economy, the Kingdom continues to adapt its economy to efficiently handle global challenges and strengthen the foundations of stability, growth, and sustainability. This is thanks to the proactive and deliberate approach adopted by the government, along with long-term financial planning that goes beyond crisis response to focus on building a flexible fiscal policy capable of absorbing shocks. In parallel, the Kingdom continues to monitor regional and international developments and efficiently employ its financial and economic tools to mitigate the effects of external changes and enhance the stability of the national economy. The strength of its financial position and the stability of its financial system have enabled it to address these developments from a position of strength and confidence.

Investments in infrastructure and strategic sectors, foremost among them logistics services and food security, have also contributed to raising the efficiency of supply chains and enhancing the smooth flow of trade, thereby strengthening the national economy's ability to face global changes. They have also helped maintain the stability of essential goods availability, reduce inflationary pressures, and enhance economic security for individuals and families.

The government is currently implementing an insurance scheme aimed at addressing the rise in insurance costs and risks associated with maritime shipping, thereby contributing to a more stable mechanism for dealing with shipping risks, mitigating the impact of higher insurance costs on importers and exporters, supporting the continued flow of goods and supply chains, and reducing the reflection of shipping and insurance costs on the private sector and consumers.

Within the framework of the Kingdom's credit assessment, international institutions, organizations, rating agencies, and global investors affirmed during the geopolitical crisis that the Saudi economy has shown a high ability to withstand external shocks, supported by structural reforms and strong domestic demand. In this context, Moody's affirmed the Kingdom's rating at 'Aa3' with a stable outlook in June 2026, S&P Global affirmed the Kingdom's rating at 'A+' with a stable outlook in March 2026, and Fitch reaffirmed the Kingdom's credit rating at 'A+' with a stable outlook in July 2026, reflecting the confidence of international institutions in the resilience of the Saudi economy, the strength of its financial position, and its ability to face economic and geopolitical changes.

Expectations indicate continued momentum in economic activity, driven by the government's ability to continue taking direct measures to support trade, logistics services, and various other economic activities.