Credit ratings highlight the Saudi Economy’s Stability

Moody's and S&P's secured the Saudi credit rating following Abqaiq-Khurais attack.
Moody's and S&P's secured the Saudi credit rating following Abqaiq-Khurais attack.

The Saudi Ministry of Finance welcomed the reports issued byinternational credit rating agencies, including Moody's, which confirmed the Saudicredit rating at its previous levels, reflecting the strength of the Saudieconomy, its stability, and its ability to face global economic challenges, andits launch towards achieving the goals of Vision 2030 and achieving economicand social development.

The Ministry expressed its reservations about the report issued byFitch Ratings, which gave Saudi Arabia a grade (A), in contrast to its previousrating (A+) maintained by the Kingdom in the previous ratings.

The ministry stressed that the Kingdom and the major Saudi companies'preservation of advanced levels in the international ratings, proves the effectivenessof the measures taken by the Kingdom in the context of promoting economicgrowth, in addition to the efforts made by Saudi Aramco in dealing with Abqaiq-Khuraisterrorist attack.

This demonstrated Aramco's professionalism and efficiency in thenon-stop supply of global markets after the recent emergency events, confirmingthe operational excellence and project management skills of this leading globalcompany.

Saudi Arabia was able to restore production capacity and reached11.3 million bpd in September, to reach 12 million bpd by the end of November,while the actual supply during October will reach 9.89 million bpd, and willmaintain Saudi Arabia, the largest oil exporter in the world, to fulfill itsfull commitments to its customers this month.

Fitch's report does not reflect the implications of the Saudi rapidresponse to such serious events, the ministry said, stressing that SaudiAramco's responsiveness and flexibility have enhanced the company's reliabilityin oil supply operations to global markets, urging Fitch to reconsider itsrating, which seems to be taken in a hurry especially that it should take intoaccount the continuity and stability of the oil supply, which reflects theconfidence of the international community in Saudi Arabia's ability to fulfillits obligations towards international markets.

In this regard, the Ministry stressed that the budget deficit fallswithin the plans announced in the state budget for 2019, and that the Saudi governmentis committed to increasing the focus of investment in key areas of the Vision2030 and continues to work to improve the efficiency and effectiveness ofspending, as it has one of the strongest reserves in the world, consideringthat the financial assets exceed their obligations.

Fitch downgrades the Saudi Ratings

Fitch has downgraded Saudi Arabia's credit rating from A+ to A witha stable outlook, explaining that the decision comes amid recent attacks onAramco facilities.

Fitch stressed that Aramco's handling of the aftermath of the incidentdemonstrates the firm's strength and ability to respond quickly and effectivelyto emergencies.

Saudi Arabia's net foreign reserves and assets remain among the topcountries that Fitch covers, the Agency confirmed.

It's noteworthy that Moody's and Standard & Poor's secured the Saudicredit rating following Abqaiq-Khurais attack.

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