Fitch Ratings has revised Saudi Arabia’s outlook from negative to stable and maintained the Kingdom’s sovereign rating at ‘A.’ The credit rating agency cited Saudi Arabia’s continued commitment to adjusting its finances and higher oil prices for the outlook revision and forecasts the Kingdom’s budget deficit to narrow to 3.3 percent of GDP in 2021, or 1.6 percent better than the initial budget target. Austerity measures introduced by the Kingdom such as the tripling of value-added tax and the removal of a cost living allowance further contributed to the improved outlook. Saudi Arabia was impacted by the COVID-19 pandemic and record-low oil prices in 2020. However, the lifting of restrictions related to the pandemic and a rebound in crude demand have boosted the economy in recent months.
