S&P Global Ratings raised Saudi Arabia’s sovereign credit rating to A+, from A, signalling strong confidence in its fiscal position which also acknowledged the kingdom’s transformative socio-economic reforms. 

The ratings agency said it could consider a positive rating action over the next two years if reforms and robust non-oil activity lead to steady growth in GDP per capita, along with stronger private and foreign investment flows that reduce pressure on public spending. 

Deepening of domestic capital markets, robust institutional checks and balances and recalibration of project priorities and timelines, and more nimble capital expenditure and debt issuance are some of the highlights that shows strong government emphasis on laying the framework for growth. 

Investment flows—both public and private—are increasingly targeting non-traditional sectors such as tourism, manufacturing, green energy, and mining, as part of an eort to reduce the economy’s dependence on hydrocarbons. These initiatives are expected to stimulate consumption among the country’s predominantly young population of over 35 million, while also enhancing Saudi Arabia’s long-term productive capacity. Over time, this should result in a more resilient and diversified economy, capable of generating sustainable employment and improving workforce participation. 

“Funding needs across the government, government-related entities (GREs), and banks are large, given the sheer scale and size of Vision 2030 projects--estimated at above $1 trillion in total. However, we assume a more gradual pace of borrowing and execution of investments,” S&P noted in its assessment. 

The ratings agency expects economic growth prospects remain solid, with real GDP expected to expand by an average of 4% over 2025-2028. The non-oil economy will be the principal driver, supported by investments in construction, logistics, manufacturing, and mining. Private consumption is expected to rise, buoyed by higher disposable incomes and government eorts to boost tourism and entertainment spending.