Fitch Affirms Saudi Arabia’s A+ Credit Rating with Stable Outlook, Citing Strong Fiscal Buffers

Fitch Ratings has affirmed Saudi Arabia’s sovereign credit rating at A+ with a stable outlook, pointing to the Kingdom's robust fiscal and external balance sheets as key cushions against recent regional geopolitical tensions and trade disruptions.Rating action In a rating action released Friday, the agency highlighted that Saudi Arabia’s government debt-to-GDP ratio and sovereign net foreign assets remain significantly stronger than peer medians. Despite economic bottlenecks stemming from the recent conflict in the region, which temporarily slowed real GDP growth forecasts to 0.6% for 2026 due to trade route closures, the Kingdom’s substantial public assets and central bank deposits have provided a strong defense. The agency also said that non-oil growth will be affected by the inability to export petrochemicals during the closure of the Strait, but noted that consumer spending held up, and business confidence is recovering.Fitch noted that while oil dependence and regional security remain notable vulnerabilities, a projected near-term widening of the fiscal deficit will be heavily mitigated by these massive financial reserves. The agency also kept Saudi banks at a 'neutral' outlook, noting they remain highly capitalized and healthy, completely avoiding the downgrades seen elsewhere in the region.Looking ahead, Fitch expects a robust economic rebound in 2027 as major gigaprojects launch operations and normal trade flows resume. Energy markets"Flows through the East-West pipeline supported oil production during the war, and we expect output to be ramped up to meet external demand following the reopening of the Strait and to rebuild domestic stocks," stated Fitch. However, it noted that an annual average of 9 million barrels per day will remain below 2025 levels. The stabilizing outlook for the Kingdom remains heavily intertwined with shifting dynamics in global energy markets. According to Fitch, a diplomatic framework allowing for a ceasefire and the crucial reopening of the Strait of Hormuz is broadly in place. The rating agency warns that as trade bottlenecks ease and normal shipping resumes, the global oil market is anticipated to return to an oversupplied state. Consequently, Fitch projects that global Brent crude prices will average $87 per barrel in 2026, before gradually pulling down to an average of $60 per barrel by 2028.