S&P Global reaffirmed Saudi Arabia’s credit rating at A+ with a stable outlook, underscoring the Kingdom’s strong policy flexibility and resilience in the face of regional conflicts.
The latest report cites the ability to redirect crude oil exports to the Red Sea through the East-West pipeline, exporting via the Yanbu port, and the substantial oil storage capacity as key mitigants against geopolitical uncertainties.
Aramco on Yanbu
It is “the biggest crisis the region’s oil and gas industry has faced”, Saudi Aramco chief executive Amin Nasser said last Tuesday.
To offset the loss of shipments via Hormuz, Nasser said Aramco will soon be using the full 7mn b/d capacity of Saudi Arabia’s East–West pipeline, which links the kingdom’s eastern oil fields to the port of Yanbu.
This would allow Aramco “to meet the majority of our customers’ requirements”, Nasser said.
Non-Oil Growth
S&P also indicated that the Kingdom’s stable outlook reflects optimism about non-oil growth and the government’s capacity to effectively prioritise economic initiatives.
The non-oil sector, constituting 70% of GDP compared to 65% in 2018, is anticipated to drive medium-term growth.
Real GDP growth rate is projected to hit 4.4% (2026) with an average of 3.3% (2027-2029).
Despite expectations of an increase in government debt, S&P Global anticipates that the authorities will sustain robust fiscal buffers, bolstered by a considerable net general government asset position.
The Kingdom’s prior commitment to diversification projects, aligned with Vision 2030, is expected to continue, enabling it to effectively manage resources and adapt to changing circumstances.
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