Moody's Affirms Saudi Arabia at Aa3, Stable Outlook

Saudi Arabia has retained its long-term sovereign credit rating at Aa3 with a stable outlook as of May 2026, in a reaffirmation that points to the Kingdom's economic resilience and steady progress on institutional and policy reforms.

The rating decision cites the Kingdom's large and wealthy economy, vast hydrocarbon endowment, competitive position in global energy markets, and ongoing improvements in policy effectiveness. The stable outlook reflects resilience to regional geopolitical risks and potential trade disruptions, supported by flexible oil export infrastructure including the East–West pipeline and Red Sea terminals.

On the economic front, real GDP is projected to contract by around 1.7% in 2026 due to an estimated 10% decline in hydrocarbon output, before rebounding by about 8% in 2027 as oil production and trade flows recover. Non-hydrocarbon private sector growth is expected to run at roughly 4–5% once regional tensions ease, driven by structural reforms, sustained public investment, and greater private sector participation under Saudi Vision 2030.

Government debt is forecast to stay moderate at around 32% of GDP in 2026, preserving fiscal flexibility, while oil market assumptions place Brent crude in the USD 90–110 Aa3 sits at the fourth-highest investment-grade level and broadly corresponds to AA- on other major scales. The Kingdom's overall profile remains firmly investment grade, with all three major rating agencies holding stable outlooks.

The affirmation follows the Kingdom's move up to Aa3 from A1 in November 2024. Its strong standing has also translated into parallel Aa3 ratings for several major government-related institutions, including the Public Investment Fund and leading national companies. For residents and businesses, a stable, high-grade rating typically supports lower borrowing costs, stronger investor confidence, and a favorable environment for long-term economic activity.

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