Fitch Affirms Saudi Arabia’s A+ Rating, Cites Strong Fiscal Position and Economic Growth

Fitch Ratings has affirmed Saudi Arabia’s sovereign credit rating at A+ with a stable outlook, highlighting the Kingdom’s strong fiscal and external balance sheets. The rating reflects Saudi Arabia’s large sovereign net foreign assets and substantial fiscal buffers, including government deposits and other public-sector holdings, which Fitch says place the Kingdom well above its “A” and “AA” peers on key financial metrics.

The rating agency noted that while oil dependence, governance indicators, and exposure to geopolitical shocks remain weaknesses, the Kingdom has made significant progress in diversifying its economy through the Vision 2030 reforms. These reforms have expanded non-oil economic activity, albeit at a cost to the balance sheets, Fitch said.

Saudi Arabia’s reserves are projected to cover 11.6 months of external payments in 2026, far exceeding the peer median of 1.9 months. Sovereign net foreign assets, while expected to decline due to higher borrowing, are forecast at 41.2 percent of GDP by the end of 2026, compared with a peer median of 3.6 percent.

The current account deficit is expected to widen to 4.3 percent of GDP in 2026 from an estimated 3 percent in 2025, reflecting high domestic spending and imported inputs. Fitch expects the deficit to narrow slightly in 2027 as oil export volumes rise, new export facilities come online, and tourism inflows increase, supported by slower import growth.

Fiscal performance is also set to improve, with the deficit projected to narrow to 3.6 percent of GDP by 2027 after reaching an estimated 5 percent in 2025. Oil revenues are expected to rise due to higher production, while non-oil revenues benefit from stronger economic activity and improved tax collection. Spending growth is expected to remain moderate as capital expenditures have peaked and measures are in place to contain current spending.

Economic growth is projected at 4.8 percent in 2026, following an estimated 4.6 percent expansion in 2025. Growth will be driven by higher oil output under OPEC+ agreements and robust performance in the non-hydrocarbon sector. Reform measures, government spending, new projects, and consumer demand are supporting healthy prospects for the non-oil economy.

Fitch also highlighted the strength of Saudi Arabia’s banking sector, citing high net interest margins, profitability, and low non-performing loans, which fell to 1.1 percent in the first three quarters of 2025. Capital adequacy reached 20 percent, and credit growth continues to outpace deposits, although macroprudential measures have slowed lending.

The agency said potential rating upgrades could result from greater non-oil revenue generation or expenditure rationalization, while further reforms supporting non-oil growth and higher oil prices could also strengthen the Kingdom’s credit profile. Conversely, a decline in public finances or a major escalation of geopolitical tensions could trigger a downgrade.

Earlier this year, S&P Global raised Saudi Arabia’s rating to A+ from A with a stable outlook, citing similar strengths and the Kingdom’s ongoing social and economic transformation.