BofA Sees Saudi Rating Risks Another S&P Cut Amid Oil Slump - Bloomberg Business

BofA Sees Saudi Rating Risks Another S&P Cut Amid Oil Slump - Bloomberg Business:

"Saudi Arabia faces an “elevated” risk of another credit rating downgrade by Standard & Poor’s as the world’s biggest oil exporter grapples with the slump in crude prices, Bank of America Merrill Lynch said.
The rating agency on Friday lowered Saudi Arabia’s credit rating one level to A+, the fifth-highest classification, saying the oil rout will increase the budget deficit in a country that relies on energy exports for more than 80 percent of its revenue. The International Monetary Fund expects Saudi Arabia to post a fiscal shortfall of more than 20 percent of economic output this year.
"Based on planned fiscal consolidation measures, we think the risk of another downgrade" is elevated, Jean-Michel Saliba, Bank of America Merrill Lynch’s Middle East and North Africa economist, said in an e-mailed report on Tuesday. S&P’s expectation of a budget deficit of 10 percent of economic output next year and 5 percent in 2018 is optimistic, he said."



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