Trump threatens 50% tariffs on Brazil if it doesn't stop the Bolsonaro 'witch hunt' trial    Trump praises 'good English' of Liberian president, prompting criticism across Africa    Saudi, Hungarian defense ministers discuss military ties    Al-Rajhi: Cabinet's decision is supportive to most vulnerable groups    King Salman appoints Dr. Majid Al-Fayyad as Royal Court advisor    Alkhorayef emphasizes Saudi Arabia's growing role as global industrial investment hub    Saudi Arabia adopts World Drowning Prevention Day as national health priority    GACA imposes SR2.8 million in fines for 87 civil aviation violations in Q2 2025    Desperate Gaza doctors cram several babies into one incubator as fuel crisis reaches critical point    Total e-messages sent to parties in lawsuits reach over 11.8 million during first half of 2025    3 arrested in assault case in Riyadh    New Property Ownership Law will take into effect in January 2026 Al-Hogail thanks King and Crown Prince for the updated law    HONOR returns to Esports World Cup as Official Smartphone Partner for 2025 The renewed commitment will see HONOR elevate mobile esports competition with cutting-edge AI technologies and industry-leading hardware    Riot Games responds to match-fixing allegations in VALORANT    BLAST responds to BESTIA Visa controversy ahead of CS2 Austin major    Christophe Galtier named NEOM SC head coach ahead of historic Saudi Pro League debut    Michael Madsen, actor of 'Kill Bill' and 'Reservoir Dogs' fame, dead at 67    BTS are back: K-pop band confirm new album and tour    Michelin Guide launches in Saudi Arabia with phased rollout in 2025    'How fragile we are': Roskilde Festival tragedy remembered 25 years on    Sholay: Bollywood epic roars back to big screen after 50 years with new ending    Ministry launches online booking for slaughterhouses on eve of Eid Al-Adha    Shah Rukh Khan makes Met Gala debut in Sabyasachi    Pakistani star's Bollywood return excites fans and riles far right    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



KSA's currency ratings upgraded
Saudi Gazette report
Published in The Saudi Gazette on 10 - 07 - 2008

Ratings agency Fitch said on Wednesday it upgraded Saudi Arabia's long-term local and foreign currency issuer ratings to AA- from A+, citing high oil prices.
Fitch also revised the outlook on Saudi Arabia's ratings to stable from positive. The ceiling has also been upgraded to ‘AA' from ‘AA-' and the short-term international depositary receipt (IDR) has been upgraded to ‘F1+' from ‘F1', Fitch said. An IDR is a negotiable, bank-issued certificate representing ownership of stock securities by an investor outside the country of origin.
“At today's oil prices, Saudi Arabia is earning around $1 billion a day from oil exports, reinforcing an already strong external balance sheet and creating a buffer against future shocks,” said Charles Seville, associate director in Fitch's sovereign team, in a statement. “Official external assets are expected to be well over 100 percent of GDP by the end of 2008, leaving Saudi Arabia second only to China as a net public external creditor.”
The agency said the Kingdom's main credit strengths were its very low indebtedness and large domestic and external assets.
General government debt, all of it domestic, fell to 7.2 percent of GDP at end-2007, while the wider public sector, represented mainly by profitable state-owned firms, has little external debt, it added. A strong banking system also makes for low contingent liabilities from that source, notwithstanding some acceleration in credit growth this year.
Fitch said however the Kingdom's overwhelming dependence on oil - 90 percent of central government revenue comes directly from oil - left it exposed to a sharp drop in oil prices. It added tough that such a fall would have to be very steep to threaten sovereign creditworthiness.
Based on Fitch's assumption of a $100/barrel average oil price in 2008, the fiscal surplus is forecast to reach 25 percent of GDP; the oil price that would reduce this to zero (the ‘breakeven' price) is around $51/barrel. Assuming a fall in the oil price to $75/barrel next year, the budget and current account surpluses would still be 13-14 percent of GDP with the net creditor position continuing to strengthen. Sizeable domestic and external assets, not to mention the capacity to borrow, would allow Saudi Arabia to withstand oil prices as low as $30/barrel for several years, without major spending adjustments.
The ratings agency added that the government budgeted cautiously and could withstand oil prices as low as $30 a barrel for several years, without major spending adjustments, thanks in part to the Saudi's sizeable domestic and external assets, and capacity to borrow.
Saudi Arabia's oil endowment is huge, but spread over a larger population than Kuwait (‘AA-' (AA minus)/Stable) or Abu Dhabi (‘AA'/Stable), resulting in a lower per capita income. Higher revenues are allowing the government to address poverty and promote economic diversification. Unemployment among Saudi males fell in 2007 for the first time in at least five years, to 8 percent from 9 percent, although youth and female unemployment is higher. The government is encouraging private sector investment to create jobs for a fast-growing population, while addressing the skills mismatches that have forced the private sector to turn to foreign labor to fill most jobs.
According to the World Bank's annual “Doing Business” report, Saudi Arabia's business environment is the most favorable of any country in the GCC and compares well with other ‘AA' sovereigns. Sustained non-oil private sector GDP growth of 6 percent is accelerating and arguably more sustainable than in some neighboring countries, and will help raise incomes and employment opportunities over time. __


Clic here to read the story from its source.