Riyadh – Mubasher: Fitch Ratings has maintained Saudi Arabia's long-term foreign-currency Issuer Default Rating (IDR) at 'A', according to a press release.

The rating agency meanwhile revised the Kingdom’s outlook to ‘Stable’ from ‘Negative’. The changed outlook was mainly due to significantly higher oil prices and continued government commitment to fiscal consolidation.

Fitch expected the government debt/gross domestic product (GDP) to rise and sovereign net foreign assets (SNFA) to decline over the medium term.

The Saudi government will likely retain significant fiscal buffers like deposits at the central bank in excess of 10% of GDP.

Fitch also predicted Saudi Arabia’s budget deficit to decrease to 3.3% of GDP in 2021, better than the 4.9% budget target.

Brent price is estimated to average $63 per barrel in 2021, up 46% from 2020, and would decline to $55 a barrel in 2022 and $53 in 2023.

The rating agency expected “Budget spending to remain better anchored to budget plans in 2021 given the uncertain medium-term oil price outlook, the government's aim to improve the Kingdom's fiscal structure and increasing public-sector spending outside the budget,” according to the statement.

Non-oil GDP growth, meanwhile, is projected to average a robust 3% during the period from 2021 to 2023.

“We forecast government debt to reach 35% of GDP by end-2023,” while central government deposits at the Saudi Central Bank (SAMA) would narrow to 11.4% of GDP by 2023 from 16.6% in 2020, Fitch noted.

As for Saudi Arabia's external finances, Fitch said:  “We forecast SAMA reserves to increase towards %470 billion in 2022-2023 as the current account returns to surplus and as public institutions and enterprises, notably the PIF [Public Investment Fund], invest less abroad and more domestically.”