Moody's stabilizes Saudi Arabia

Moody's Investors Service said it changed the outlook on the government of Saudi Arabia to stable from negative and affirmed its long-term issuer and senior unsecured ratings at A1.

“The change of outlook to stable reflects increased likelihood that, in the next several years, the government will reverse most of the 2020 increase in its debt burden while also preserving its fiscal buffers. This view is based on Moody's assessment of the government's improving track record of fiscal policy effectiveness, evidenced by policy responses in periods of both low and high oil prices, that consistently demonstrate a commitment to fiscal consolidation and longer-term fiscal sustainability,” the agency said in a press release.

Higher oil prices will power the projected fiscal improvement over the next several years, although the stable outlook also considers the expectation that oil prices will remain volatile, Moody’s noted.

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