S&P affirms #Saudi rating on expected rebound through 2024 | Reuters

S&P affirms Saudi rating on expected rebound through 2024 | Reuters

S&P Global Ratings on Tuesday affirmed Saudi Arabia's A- (minus) credit rating with a stable outlook, expecting a rebound in growth through 2024 driven by higher oil prices, eased OPEC production quotas and a large vaccine rollout in the kingdom.

After the COVID-19 pandemic weighed on the economy, Saudi Arabia has returned to ambitious investment projects linked to its strategy of weaning the economy off oil, S&P said. Significant investments are being made by the Public Investment Fund, the kingdom's sovereign wealth fund, and other entities in both the oil and non-oil sectors.

The rating agency sees Saudi Arabia's deficit dropping from 11.2% last year to 4.3% in 2021, while averaging 5.7% between this year and 2024. Real GDP growth is expected to average 2.4% in the same period after contracting 4.1% in 2020.

"In 2021, higher oil prices are being partially counterbalanced by constrained annual Saudi oil production volumes, which continue to be limited by an OPEC deal," S&P said in a mid-year review.