Fitch Ratings has affirmed Saudi Arabia’s credit rating at the fifth-highest investment grade, but warns about the country’s heavy reliance on oil revenues. According to Fitch, the Saudi government needs oil prices to average more than $90 a barrel in 2024 to balance its budget, a figure higher than the International Monetary Fund’s forecast of just under $80.
Fitch analysts predict that the fiscal break-even price will remain above $90 per barrel this year before falling to $85 per barrel in 2025. Saudi Arabia’s dependence on energy prices remains a weakness to its overall creditworthiness, and Fitch notes that a swing of $10 a barrel in crude prices would impact its budget projections by 2% to 2.5% of GDP. Saudi Arabia’s lower oil production, caused by output cuts to support prices, has come at a cost to its economy, which contracted 0.9% in 2023, according to official estimates. Despite these challenges, Fitch expects non-oil economic growth in Saudi Arabia to be supported by public-sector investment.
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