Moody’s, the global credit rating agency, has affirmed Saudi Arabia’s ‘A1’ credit rating with a positive outlook. This reflects the government’s significant progress in implementing a broad-based reform agenda since 2016.
The rating agency highlighted the effectiveness of the Kingdom’s macroeconomic and fiscal policies, which support sustainable economic diversification.
Moody’s expects the continued implementation of large-scale diversification projects in Saudi Arabia to bolster non-hydrocarbon real GDP growth, as these projects are designed to be modular and commercialized in phases.
The positive outlook is attributed to the ongoing reforms and investments in various non-oil sectors, which are anticipated to reduce the Kingdom’s economic and fiscal dependence on hydrocarbons over time.
Additionally, Moody’s noted Saudi Arabia’s large economy, improving institutions and policy effectiveness, robust balance sheet, and substantial foreign currency reserves.
Moody’s affirmation of Saudi Arabia’s ‘A1’ credit rating with a positive outlook signals the agency’s confidence in the government’s ability to successfully execute its reform agenda and diversify the economy beyond its reliance on oil and gas.
Steady inflation rate
According to the latest report from the General Authority for Statistics (GASTAT), Saudi Arabia’s inflation rate remained stable at 1.6 percent in April, marking the second consecutive month at this level.
The Consumer Price Index (CPI) in the Kingdom experienced a marginal increase of 0.3 percent in April compared to March. This slight uptick was primarily due to a 0.4 percent rise in the prices of housing, water, electricity, gas, and other fuels. This increase was largely attributed to a 0.4 percent rise in actual housing rents and prices.
Despite the minor price movements in certain sectors, the overall inflation rate in Saudi Arabia held steady at 1.6 percent for the second straight month, indicating a stable inflationary environment in the country.
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