S&P: Saudi credit rating confirmed with stable outlook

Kingdom Tower in Riyadh, Saudi Arabia. S&P confirmed its credit rating of Saudi Arabia
Kingdom Tower in Riyadh, Saudi Arabia. S&P confirmed its credit rating of Saudi Arabia

Standard & Poor's Ratings Agency (S&P) has confirmed its credit rating of Saudi Arabia at A-A-2 with a stable outlook.

S&P based its forecast on the speedy recovery in oil production after Abqaiq–Khurais attack (Aramco's facilities).

S&P said that its stable outlook for Saudi economy reflects itsexpectations of a speedy recovery of Saudi oil production in the wake of Abqaiq–Khuraisattack on the 14th of this month.

S&P pointed out that its stable outlook also reflects its expectationsthat the Kingdom of Saudi Arabia will maintain a pace of moderate economicgrowth despite geopolitical challenges in addition to maintaining a strong budgetand financial position over the next two years despite the high deficit.

S&P expected the Saudi government to maintain a balance betweenspending to stimulate the economy and strengthening the fiscal discipline.

Onthe other hand, S&P predicted that net government assets, reflectingthe surplus of liquid assets on government debt, would represent 65% of GDP onaverage between 2019 and 2020.

S&P expects the kingdom's real GDP to shrink by 0.4% this year, mainlydue to a decline in oil production due to OPEC Agreement and Abqaiq–Khuraisattack, with real GDP growth to return by 2.3%, on average between 2020 and2022.

Besidesthe budget, the Saudi government has plans to increase capital investment withefforts led by the Public Investment Fund and the National Development Fund,which will support economic growth in the coming years, according to S&P.

Threesources familiar with Saudi Aramco's operations told Reuters that the kingdomhad recovered its oil production capacity to 11.3 million bpd, recoveringfaster than expected after Abqaiq–Khurais attack on the 14th of thismonth.

The sourcesadded that crude oil production from the Khurais oil field now stands at 1.3million bpd and about 4.9 million bpd from the Abqaiq facility.

Abqaiqproduction was about 3 million bpd, Sources said on Monday.

The Abqaiq–Khuraisattack, on the 14th of this month, led to a jump in oil prices, fires,and damage that cut crude oil production at the world's largest exporter byhalf after halting production of 5.7 million bpd.

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