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S&P Global Ratings affirmed its A+/A-1 long-term and short-term foreign and local currency sovereign credit ratings on Saudi Arabia on March 13, 2026, while maintaining a stable outlook. The agency’s report highlighted the kingdom’s robust policy flexibility and sizable fiscal buffers as central to its capacity to absorb shocks from escalating conflict in the Middle East. S&P Global Ratings noted that its baseline scenario assumes the main threats facing the kingdom will begin to ease by the end of March, allowing a return to more normal economic conditions. The assessment also incorporates Saudi Arabia’s transfer and convertibility rating at AA-.
The stable outlook reflects Saudi Arabia’s ability to redirect crude oil exports to the Red Sea via the East-West pipeline and its substantial oil storage capacity, according to the S&P Global Ratings assessment. These assets serve as critical mitigants against disruptions such as restrictions in the Strait of Hormuz, enabling the kingdom to sustain export levels through the Yanbu port. S&P Global Ratings added that spare production capacity would allow Saudi Arabia to ramp up output once hostilities subside, offsetting any temporary losses in supply.
Non-oil expansion will continue to support medium-term growth, with S&P Global Ratings forecasting real GDP growth of 4.4 percent in 2026 and an average of 3.3 percent between 2027 and 2029. The non-oil sector, including government activities, now accounts for about 70 percent of GDP, up from 65 percent in 2018, a development the agency attributes to structural advances under economic diversification programs. This shift has reduced reliance on hydrocarbons while broadening the base for sustained expansion.
Despite a projected increase in government debt levels, S&P Global Ratings expects the authorities to maintain robust fiscal buffers supported by a sizable net general government asset position. The agency observed that Saudi Arabia had already begun prioritizing diversification projects linked to Vision 2030 prior to the latest geopolitical developments to better align plans with available resources. Officials are anticipated to pursue a prudent and flexible fiscal approach that safeguards public finances without compromising long-term development objectives.
General Authority for Statistics data show that non-oil activities expanded by 0.6 percent year-on-year in the second quarter of 2026, even as overall GDP contracted due to weaker oil output. The authority’s preliminary estimates place non-oil and government activities as partial offsets to the oil sector decline, with sectors such as finance, insurance and business services recording gains of 3.3 percent. These figures align with the rating agency’s emphasis on diversification as a stabilizing force.
Saudi Arabia’s economy reached $1.31 trillion in 2025, driven by non-oil sectors, tourism and investment, according to the National Transformation Program 2025 Annual Report. The kingdom welcomed 123 million tourists that year, bolstering service sector performance and supporting broader growth targets. The International Monetary Fund has projected non-oil growth at 2.6 percent for 2026 before accelerating to 4.5 percent in 2027, underscoring continued momentum in reform implementation.
Fitch Ratings has similarly assigned an A+ rating with stable outlook, placing Saudi Arabia among the higher-rated sovereigns in the Middle East, according to compiled credit data from FX Empire. S&P Global Ratings affirmed that ongoing execution of Vision 2030 initiatives will underpin non-oil prospects while containing pressures on public finances through recalibration of select infrastructure projects. The agency’s report stressed that these elements collectively position the kingdom to navigate current uncertainties.
