Global Credit Rating Agencies Praise Saudi Budget’s Preliminary Statement Figures

An array of international credit rating agencies praised the figures included in the preliminary statement of the general budget of the Kingdom of Saudi Arabia for the Year 2022, which reflects the soundness of the financial policies and structural reforms undertaken by the government in light of the Kingdom’s Vision 2030.

In its report, “Fitch” agency considered that the Kingdom’s maintenance of large financial reserves is supportive of the credit rating, and also provides greater flexibility to facilitate public financing needs in light of the instability of oil revenues. The agency estimated that the reserve would rise in the medium term, while it previously expected it to stabilize at a minimum level of SR265 billion, in 2022-2023.

In turn, “Moody’s” considered the spending plan referred to by the government in the preliminary statement of the budget as an indicator of a positive development for the credit rating of the Kingdom, as Deputy Chief Analysts at the agency, Alexander Bergesi, explained that this confirms the government’s commitment to controlling spending despite the significant upward revisions to revenue expectations. amid rising oil prices. The preliminary statement of the state’s general budget for the fiscal Year 2022, which was announced by the Ministry of Finance last Thursday, in conjunction with the issuance of the semi-annual financial and economic performance report for the Year 2021, expected that the total expenditures would amount to about R955 billion during the Year 2022, with continued work to enhance spending efficiency, and maintain Financial sustainability, achieving the goals of the Kingdom’s Vision 2030, implementing economic and financial reforms, as well as the vision’s programs, initiatives and major projects, rearranging priorities based on developments and developments, providing more investment opportunities for development funds and the private sector, in addition to allocating some government programs and services, and development projects. Infrastructure.

The preliminary statement estimated that the gradual return to the Kingdom’s economic recovery would lead to positive developments on the revenue side for 2022 and in the medium term, as it is expected to reach about SR903 billion.

It is also estimated that the government’s continuous efforts will be reflected in the diversification of the economy, through the implementation of many programs and initiatives that are directly related to achieving the goals of Vision 2030, leading to continued revenue growth, to reach about 992 billion riyals in the Year 2024, also driven by expectations of local and global economic recovery. In the medium term, after the effects of the Corona pandemic recede.

The recent reports of global rating agencies came to prove the soundness of the measures and policies taken by the government, as evidenced by the recovery and strong economic recovery, and that easing the restrictions of the pandemic will launch a new wave of demand, especially since the government launched in the first quarter of 2021 a program to strengthen Partnership with the private sector is a “partner” with the aim of enhancing the development and flexibility of the economy by increasing the GDP and diversifying the economy, as well as launching private sector investments and the accumulated investments across all axes of the national economy, to reach 5 trillion riyals by 2030, and adding up to SR2 trillion to the GDP the total by 2025, providing hundreds of thousands of new job opportunities, and accelerating the investment plans of major companies, as the wheel began to turn at a rate that exceeded all expectations in order to achieve these goals.