© 2020 All rights reserved to Maaal Newspaper
Publisher: Maaal International Media Company
Fitch Credit Rating Agency estimated that Saudi Arabia’s budget for the current year 2024 requires an oil price exceeding $90, and while the general budget does not announce the target price for oil, financial institutions and economic researchers estimated the price stated in the budget upon its issuance at around $80 per barrel.
A report by Jadwa Investment Company suggested that the Saudi government adopted a “cautious stance” on oil prices in the estimates of the state’s general budget for the year 2024, in light of the current data of the oil market. The report adds that it is normal for the government not to disclose oil price and production assumptions (oil revenues are included in another revenue bracket).
The Kingdom estimated revenues for 2024 at 1,172 billion, expenses at 1,251 billion, and the deficit at 79 billion. On the other hand, actual revenues for the year 2023 amounted to 1,193 billion riyals, expenses were 1,114 billion riyals, and the deficit was 82 billion riyals.
Fitch confirmed its credit rating for the Kingdom at A+ with a stable outlook, according to its recently issued report. The agency explained in its report that the Kingdom’s credit rating reflects the strength of its financial position, as the assessment of the ratio of debt to gross domestic product and net sovereign foreign assets was above the average ratings of “A” and “AA,” in addition to the presence of large financial reserves in the form of deposits and other sector assets. General.
The agency assumed that net sovereign foreign assets would remain higher than 50% of GDP in the year 2024-2025, which is considered a high rate compared to the average “A” rating (6% of GDP) and the average “AA” rating (34% of GDP). The agency also indicated that the Kingdom is continuing financial reforms. Which would increase the flexibility of the general budget in the face of oil price fluctuations. In its report, the agency expected the non-oil private sector to grow at a rate of up to 4.5% between the years 2024-2025 AD, after growing at an average rate of about 5% in the year 2022-2023.