S&P gives thumbs up to Saudi credit rating

Published 8 Jun 2014
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S&P gives thumbs up to Saudi credit rating

RIYADH — e-Media

Standard and Poor's has held its sovereign credit rating for Saudi Arabia, the world's top crude exporter, at AA-/A-1+ with a positive outlook. "In our view, Saudi Arabia's government and external balance sheets remain strong and provide an ample buffer to withstand external shocks, including a drop in oil prices," S&P said in a statement late Friday.

"We are therefore affirming our 'AA-/A-1+' sovereign credit ratings on the Kingdom of Saudi Arabia," the agency said.

"The positive outlook indicates that we could upgrade Saudi Arabia in the next year if we believe that the government has built on its achievements in private-sector development."

It forecast per capita income of $26,000 in 2014.

Saudi Arabia, on the back of high oil prices, has announced a balanced budget for this year of a record $228 billion, up from $218.8 billion in 2013.

Meanwhile, Standard & Poor’s Ratings Services put out research confirming the AA+ rating of the United States. Although it outlines a broad set of economic and fiscal strengths that keep the rating near the top of the scale, one of the key concerns holding down the rating is the government debt burden.

The rating agency dropped the US one notch in 2011 amid the first debt-ceiling debate, in which US lawmakers were unable to reach a deal to avoid defaulting on government debt until the last minute. That made S&P the only major ratings agency not to give the US a sterling AAA score.

Now, S&P says there’s a one-in-three chance the rating will change over the next two years. That means the US could regain the vaunted AAA rating if the agency sees more bipartisan efforts in fiscal policy-making, as well as, “ a general government debt burden decline more pronounced than we currently expect.”

Last Modified Date: 08/06/2014 - 12:00 PM Saudi Arabia Time


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