Saudi Arabia Retains Aa3 Rating As Moody’s Cites Economic Resilience

RIYADH: Saudi Arabia’s sovereign credit rating was affirmed at “Aa3” with a stable outlook by Moody’s Ratings, with the agency citing the Kingdom’s strong economic fundamentals, expanding non-oil economy, and resilience to regional geopolitical risks and trade disruptions.

Moody’s said the rating reflects Saudi Arabia’s large economy, substantial hydrocarbon reserves, and highly competitive position in global energy markets, alongside improving institutional and policy effectiveness, according to a release issued by the National Debt Management Center.

It also pointed to progress under the Vision 2030 reform program, which the agency said has supported non-oil growth through sustained public investment, structural reforms, and improved fiscal transparency.

The stable outlook reflects the Kingdom’s ability to manage external shocks through flexible export infrastructure, including the East-West pipeline and Red Sea export terminals, reducing reliance on Gulf shipping routes.

Ahmad Chreim, economist at MT Trading, told Arab News that Moody’s affirmation of the Kingdom’s Aa3 rating and stable outlook reflects more than oil wealth, highlighting what he described as Saudi Arabia’s structural decoupling and fiscal discipline.

“First, the decoupling of non-oil GDP is the true anchor here. With Vision 2030 reforms pushing non-oil growth to stabilize between 4 percent and 5 percent, the Kingdom has proven it can generate internal economic momentum that is shielded from the traditional boom-and-bust cycles of global oil markets,” Chreim said.

Moody’s added that economic diversification is expected to continue gaining momentum over the coming years as the government advances reforms across the judicial, economic, and social sectors. Those measures have helped accelerate growth in the services sector and the broader non-oil economy.

The agency also expects non-oil private-sector gross domestic product growth to return to around 4 percent to 5 percent after regional geopolitical tensions ease, among the strongest projected rates in the Gulf Cooperation Council region.

Chreim said fiscal discipline is also yielding “real macro benefits,” noting that by maintaining steady primary surpluses, public debt is on track to decline to around 30 percent of GDP by 2027.

“I find this deleveraging strategy particularly well-timed, as it lowers borrowing costs just when mega-projects need capital efficiency the most,” he said.

The Moody’s affirmation follows similar actions by other major credit rating agencies this year. S&P Global Ratings affirmed Saudi Arabia’s A+ rating with a stable outlook in March, citing strong fiscal buffers and export flexibility despite elevated regional tensions.

Fitch Ratings also maintained the Kingdom’s A+ rating with a stable outlook earlier this year, pointing to robust fiscal and external balance sheets.

Saudi Arabia’s economy expanded 2.8 percent year on year in the first quarter of 2026, according to preliminary estimates published by the General Authority for Statistics in May, supported by growth across both oil and non-oil sectors.