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Ratings agency Fitch on 22 March downgraded its long-term sovereign credit rating for Saudi Arabia by one notch to ‘A+’ (with a stable outlook).
A+ is the agency’s fifth highest rating, though it is two notches below the ‘AA’ rating afforded to Abu Dhabi, Kuwait and Qatar. Of other GCC countries, Oman is rated ‘BBB’, the second lowest investment grade, whilst Bahrain has a ‘B+’ ‘junk’ rating (see chart).
This marks Fitch’s second downgrade of Saudi Arabia in 11 months and comes as the country’s foreign reserves have dwindled. Latest data show the Saudi Arabian Monetary Authority net foreign assets as of end-January falling below SR2 trillion for the first time since October 2011. At $524bn they are 30% below the record $746bn level hit in mid-2014 ( MEES, 10 March ). The country’s 2017 budget projects a whopping $53bn deficit, albeit down by a third from 2016 ( MEES, 6 January ). (CONTINUED - 466 WORDS)