Moody's fixed Saudi Arabia's credit rating at A1, with a negative outlook, revealing that the budget has strong performance with low debt levels.
The agency announced that changing the future view of Saudi debt to negative reflects low oil prices with the impact of the Coronavirus, which casts a shadow on all countries of the world.
Moody’s showed that the decline in oil prices caused the loss of oil revenues and exports due to the decline in demand for crude that hit the world markets during the past period against the backdrop of the pandemic.
The agency noted the strong performance of the Saudi budget, with strong fiscal buffers and low debt levels. Adding that stabilization of the credit rating of Saudi Arabia, despite the decline in oil prices is due to the strength of the government budget thanks to the low levels of debt and liquidity stocks that allow the shock absorbers.
The agency expected Saudi oil revenues to drop by about 33% this year and about 25% in 2021, despite the high rate of decline in oil prices. It also revealed that the slowdown in GDP will put pressure on oil sector revenues, but the effect on the government budget will be limited, taking into account the limited budget dependence on non-oil revenues.
Source (Al-Arabiya.net website, Edited)
