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 its expectations of a speedy recovery of Saudi oil production in the wake of Abqaiq–Khurais attack on the 14th of this month.
S&P pointed out that its stable outlook also reflects its expectations that the Kingdom of Saudi Arabia will maintain a pace of moderate economic growth despite geopolitical challenges in addition to maintaining a strong budget and financial position over the next two years despite the high deficit.
S&P expected the Saudi government to maintain a balance between spending to stimulate the economy and strengthening the fiscal discipline.
On the other hand, S&P predicted that net government assets, reflecting the surplus of liquid assets on government debt, would represent 65% of GDP on average between 2019 and 2020.
S&P expects the kingdom’s real GDP to shrink by 0.4% this year, mainly due to a decline in oil production due to OPEC Agreement and Abqaiq–Khurais attack, with real GDP growth to return by 2.3%, on average between 2020 and 2022.
Besides the budget, the Saudi government has plans to increase capital investment with efforts led by the Public Investment Fund and the National Development Fund, which will support economic growth in the coming years, according to S&P.
Three sources familiar with Saudi Aramco’s operations told Reuters that the kingdom had recovered its oil production capacity to 11.3 million bpd, recovering faster than expected after Abqaiq–Khurais attack on the 14th of this month.
The sources added that crude oil production from the Khurais oil field now stands at 1.3 million bpd and about 4.9 million bpd from the Abqaiq facility.
Abqaiq production was about 3 million bpd, Sources said on Monday.
The Abqaiq–Khurais attack, 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 by half after halting production of 5.7 million bpd.