Standard & Poor’s kept Saudi Arabia’s sovereign credit rating at A+ with a stable outlook, while lowering its forecast for the economy in 2026 to a 0.9% contraction in real gross domestic product, before projected growth of 8.2% in 2027 as oil production rises.
Energy export routes support resilience
The rating affirmation was based on the Saudi economy’s ability to absorb pressures stemming from geopolitical tensions in the region, supported by diversified energy export infrastructure and the ability to redirect crude oil exports to the Red Sea through the East-West pipeline, as well as the kingdom’s domestic and international oil storage and refining capacity.
The agency said that multiple export routes and storage and refining capacity give the kingdom room to manage disruptions to energy flows and limit the direct transmission of geopolitical shocks to the domestic economy, amid pressures facing regional infrastructure and energy supply chains.
Growth tied to the oil production cycle
Standard & Poor’s expects real output to grow by 8.2% in 2027 after contracting 0.9% in 2026, driven by higher oil production, before slowing to an average of 3.3% in 2028 and 2029. The forecasts reflect the sensitivity of Saudi growth to the oil production cycle, alongside the expansion of the non-oil economic base.
The non-oil sector, including government activities, currently accounts for about 70% of gross domestic product, compared with 65% in 2018. The agency said non-oil activity had maintained a degree of resilience despite geopolitical tensions, supported by continued consumer spending.
Government assets and reserves bolster rating
The agency identified net general government assets as one of the kingdom’s key strengths, alongside foreign-exchange reserves reaching their highest level since early 2020. It also said recalibrating the implementation priorities of Saudi Vision 2030 projects could support public-finance resilience.
