Economic reforms reduced Saudi Arabia’s dependence on oil revenues

Saudi economy

Professor of Finance and Investments at Al-Imam University, Dr. Muhammad Makhni, Fitch Ratings’ report on Saudi Arabia is an extension of reports from credit rating agencies Moody’s and Standard & Poor’s two weeks ago, which acknowledged the positive numbers. On the strength of the Saudi economy.

The reports of the rating agencies all agree on the issue of comprehensive economic structural reforms leading to clear financial stability and the development of financial programs and policies, and all these things have contributed to credit balance and local growth. In 2022, the economy touched 8.7%.

Makhni agreed with Fitch on its expectations for non-oil private sector growth of 5% in Saudi Arabia to 2023, as the sector achieved a growth rate of 5.4% last year.

10 years ago, the budget depended on oil revenue for 90%, but now this percentage has reached 60%, which is a huge success for the efforts of the government.

Today, Wednesday, Fitch Ratings raised Saudi Arabia’s rating from “A” to “A+”, in a report seen by Al Arabiya.net.

The agency said the strength of domestic and foreign public finances, the debt-to-GDP ratio and strong net foreign sovereign assets, with a stable outlook, helped improve the kingdom’s rating.

The agency said foreign reserves excluding gold remained stable at $459 billion in 2022.

Makhni explained that the GDP was $650 billion in 2016 and is now $1.7 trillion. These are big figures for the Saudi economy and a series of confirmations from credit rating agencies that provide signs of growth in the Saudi economy between 2023 and 2026.

“In the past months, we have faced challenges related to oil prices due to the banking crisis in the United States and Europe, but the decision by OPEC Plus two days ago to cut production has helped oil prices rise in the last two days,” Magni said, pointing to the Saudi budget setting the price of oil at $86 a barrel. The rise has helped a lot, and I believe that this year, the price of oil will not drop below $80, which will generate good returns and help Saudi Arabia continue to grow.

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