The Ministry of Finance announced today that Fitch outlook has moved from negative to stable, noting that the recent downgrade to the Sovereign rating we understand was based upon a quantitative, number-driven analysis and was anticipated. The Ministry added that 2016 projected revenues ahead of estimate, registering SAR528bn out of which SAR199bn representing non-oil sector or 38% of the total revenues. The Ministry's statement said that 2016 saw the launch of Vision 2030 and the National Transformation Program (NTP), which amongst many other initiatives would contribute to reaching a balanced budget by 2020. The government has also increased its' funding flexibility by successfully tapping external credit markets for the first time and opening up local capital markets to foreign investors, the Ministry said adding that the Kingdom's oil policy has borne fruit, resulting in a more stable global oil price environment. In the meantime, the Saudi economy has structurally aligned itself to a lower oil price environment as reflected in a more sustainable balancing price for its' fiscal and current accounts. Commenting on the occasion, H.E. Mohammed Al-Jadaan, Minister of Finance, said "The fundamentals of the Saudi economy remain strong as the Kingdom's balance sheet remains strong with SAMA's FX assets estimated at 84% of GDP, the third largest in GDP terms globally. General government assets are considerably above 100% of GDP". "Through the Kingdom's Vision 2030, a number of concrete structural measures have already been rolled out, with the twin goals of decreasing the Kingdom's fiscal dependence on hydrocarbons and encouraging economic diversification", the Minister said, adding that "the government has also made considerable progress in enhancing efficiency by reigning in overspending and optimizing expenditure". He concluded by saying that "these efforts have been made possible through strengthened governance, institutionalization of structural reforms, and enhanced transparency."
