Global agency affirms Saudi Arabia credit ratings
“Recent shifts in Saudi Arabia’s political power structures and societal norms, alongside various regional stresses, could increase the risk of policy mistakes that could result in increased domestic and geopolitical tensions,” S&P said.
Crown Prince Mohammed bin Salman last year unveiled his Vision 2030 program of economic and social reforms for a post-oil era and has recently announced a host of multi-billion-dollar mega projects, including a futuristic megacity with robots and driverless cars.
But this month’s wide-ranging crackdown on dozens of elites, ostensibly to tackle corruption, coupled with increased tensions between Saudi Arabia and its regional rival Iran, have provoked concern among investors.
Analysts have warned the uncertainty could intensify capital flight or derail reforms at a time when the kingdom is seeking to attract badly needed investments to offset a protracted oil slump.Saudi Arabia, the world’s top oil supplier, has posted more than $200 billion in budget deficits in the past three years and has withdrawn heavily from its reserves.
Following the energy slump, the kingdom undertook reforms and fiscal measures to cut public spending and boost non-oil revenues.The kingdom has also introduced a series of price hikes, imposing fees on expats and preparing to introduce value-added tax inthe new year.