Riyadh – Mubasher: Moody's Investors Service on Saturday downgraded Saudi Arabia's government long-term issuer ratings to A1 from Aa3 and assigned a stable outlook.
The downgrade "reflects Moody's view that lower oil prices have led to a material deterioration in Saudi Arabia's credit profile," the ratings agency noted in its statement, adding that a lower growth, higher debt levels and smaller domestic and external buffers may leave the Kingdom less well-positioned to confornt future shocks.
"The stable outlook indicates that, at this lower rating level, risks are broadly balanced. In the absence of further fiscal and economic reform, the pressures on the government's balance sheet would continue to rise," Moody's said.
The ratings agency further highlighted that the Saudi government "has ambitious and comprehensive plans to diversify both the economy and its balance sheet which, if even partly successful, should stabilize its credit profile and which could, if achieved, offer a route back to a higher rating level over time."
"[Saturday's] rating action concludes the review for downgrade which Moody's initiated on 4 March 2016," the statement added.
