Moody's affirmed Moody's credit rating on A1 with a stable outlook and raised its forecast for Saudi GDP growth for the period 2018-2019 to 2.5% and 2.7%, respectively, instead of its previous forecast of 1.3% and 1.5%. In the same period in April of this year, and thus exceed in its positive forecasts the expectations of the Government of the Kingdom announced in the preliminary statement of the budget declaration for 2019 on 30 September 2018.
AlArabiya published a report in which Moody's expects higher oil production to boost the economy, as well as developments in the non-oil sector to contribute to stronger GDP growth. In its latest review, AlArabiya indicated that plans to diversify the Kingdom's economy away from oil are likely to boost average growth And long-term in the Kingdom.
Moody's also revised and revised its financial projections for the deficit after publishing the preliminary statement of the budget declaration for 2019. Its forecasts for the size of the government deficit for the period (2018-2019) were about 3.5% and 3.6% respectively, instead of The previous trend of 5.8% and 5.2%. The debt trend will also improve significantly over the next two years as debt levels are expected to remain below 25% of GDP in the medium term, a small percentage Strong fiscal position.
Moody's praises Saudi Arabia's policy of prudent spending, with rising oil revenues. Moody's predicted that the Kingdom's fiscal deficit would fall to 3.5 percent of GDP in 2018 compared to 2017 levels.
Moody's praised the financial management of Saudi Arabia, where it saw that this year's expenditure is in line with its planned government budget. Moody's said this is a sign that the government is trying to control spending levels throughout the year through sound planning, control and control.
On the other hand, Moody's acknowledged the remarkable results in the collection of non-oil revenues, noting that revenues during the first half of this year rose by 43% compared to the same period last year, as a result of the increase of average oil prices by 37% and doubled tax revenues on goods and services for nearly three The far-off entry into force of the VAT decision took effect on 1 January 2018.
As for Saudi Arabia's credit rating, Moody's said a stable outlook indicates that credit rating risk is generally balanced. So that over time economic reform programs, including the Financial Balancing Plan by 2023, could provide the road to a higher level of classification. Moody's also added a strong recommendation to the kingdom's credit rating: "In addition to the moderate funding requirement, the government has access to ample sources of liquidity from both local and international capital markets and financial reserves, Financing the fiscal deficit ".
Moody's, a credit rating agency founded by John Moody in 1909, conducts economic research and financial analysis and evaluates private and government institutions in terms of financial and credit strength.