S&P Global granted a sovereign debt rating for Saudi Arabia (A-/A-2) with a stable outlook, indicating that its estimates of the strong position of the Kingdom's net assets remain a major support factor for the ratings. However, on the other hand, the agency expected that the continued decline in oil prices would be a challenge and could have negative repercussions in the long run.
According to the agency, the expansionary government budget in Saudi Arabia will be sufficient to boost the GDP growth to exceed 2% during the years 2020 and 2021, although credit growth will remain at moderate levels.
It also expected that banks in Saudi Arabia will maintain stable levels of financial risk indicators during the year 2020, although growth remains largely dependent on oil market movements and is also linked to global economic conditions and regional geopolitical trends.
Mortgage financing, according to the agency, will be one of the main drivers of loan growth in the Kingdom, while credit losses will settle at around 70 basis points, while growth prospects will remain linked to commodity prices.
Source (Al-Arabiya.net Website, Edited)
