Saudi Arabia Keeps Aa3 Rating With Stable Outlook

Saudi Arabia's long-term sovereign credit rating has been affirmed at Aa3 with a stable outlook as of May 2026, reflecting continued fiscal and economic resilience. The Aa3 level is the fourth-highest investment-grade rating, indicating very strong creditworthiness and low expected default risk.

The rating reflects the Kingdom's large, high-income economy, its substantial hydrocarbon reserves and low-cost oil production, and a strong external position backed by significant foreign assets. Export capacity through the East–West pipeline and Red Sea terminals reduces reliance on Gulf shipping routes, supporting continuity of oil revenues even under scenarios of constrained traffic through the Strait of Hormuz.

Government debt is expected to remain moderate at around 32% of GDP in 2026, broadly in line with similarly rated sovereigns, with the potential to decline toward roughly 30% of GDP by 2027 under continued primary surpluses. Improving institutional and policy effectiveness, driven by ongoing reforms under رؤية السعودية 2030, is also cited as a key strength.

Growth and outlook

Real GDP in 2026 is projected to contract by about 1.7% in a scenario of continued severe disruption, mainly due to an estimated 10% decline in hydrocarbon output. In a baseline of eased tensions, earlier projections point to growth of around 4.5%. Non-oil activity may slow temporarily on weaker confidence and higher costs, but medium-term non-oil private sector growth is expected to return to roughly 4–5% once tensions ease.

Higher projected oil prices in the USD 90–110 range are expected to offset lower export volumes, supporting an improvement in fiscal and external balances despite higher spending. For residents and businesses, a stable rating signals continued confidence in the Kingdom's economic stability and its ability to absorb regional and trade shocks.

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