Mubasher: Fitch Ratings has affirmed Saudi Arabia's long-term foreign-currency issuer default rating (IDR) at 'A+' with a Stable Outlook. 

According to Fitch, Saudi Arabia's ratings are supported by strong fiscal and external balance sheets, including exceptionally high international reserves, low government debt, significant government assets and strong commitment to an ambitious reform agenda. 

However, the ratings agency said that these strengths are balanced by high oil dependence, the prospect of slow non-oil growth, weak World Bank governance and business environment indicators and large fiscal deficits. 

The central government deficit is expected to narrow to 8.7% of GDP in 2017, from 17.2% in 2016, largely as a result of higher oil prices and because clearance of arrears that widened the 2016 deficit by 4.4% of GDP will no longer be necessary. 

The deficit will shrink more moderately in subsequent years to 5.4% of GDP in 2019, the report indicated. 

Although the Saudi government pointed that expenditure may rise 4% next year, a number of revenue measures should still lead to a significant improvement of the fiscal position, added Fitch. 

The government is expected to raise energy costs before the end of the year, and will also introduce a 5% value added tax at the beginning of 2018, with further energy price reforms and expat levies also planned.

The measures are part of the government's ambitious reform agenda, the Vision 2030, which seeks to put public finances on a sustainable basis but also aims to reduce the dependence of the government on oil revenue.

The planned sale of a 5% stake in Saudi Aramco will primarily be used to fund domestic investments to diversify the economy. As such it is likely to have a limited impact on the government's balance sheet.