After Moody’s rating agency revised Saudi Arabia’s outlook in “stable,” the agency expected the kingdom’s government to reverse most of its debt increase in 2020, while maintaining financial security margins.
Before issuing the agency report that proved The Kingdom’s “A1” rating said Alexandre Bergese, Vice President and Senior Analyst at Moody’s, the credit rating agency, said the estimated spending reduction in the Saudi budget for the years 2022 and 2023 is in in line with the Kingdom’s fiscal budget program, noting that these estimates are positive on the credit side.
He explained that these estimates confirm the Kingdom’s commitment to control spending despite expectations that the government’s revenues will increase thanks to the increase in the price of oil.
Interestingly, the preliminary budget estimates a decline in spending to 955 billion riyals in 2022 and 941 billion riyals in 2023.
Moody’s report also highlighted Saudi Arabia’s moderate debt burden, which is lower than that of most similarly-rated countries, as well as economic strength underpinned by the country’s highly competitive position in the oil market.
The largest Arab economy recorded a budget surplus of 6.7 billion riyals ($ 1.79 billion) in the third quarter of questyear, as high oil prices fueled its first quarterly surplus since 2019.
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