Riyadh – Mubasher: Moody's Investors Service on Friday placed Saudi Arabia's Aa3 issuer rating on review for downgrade.
Moody's will assess the extent of the impact of the further sharp fall in oil prices, which Moody's expects to remain low for several years, on Saudi Arabia's economic performance, its government balance sheet, and its balance of payments in the coming years.
The review is expected to be completed within two months, Moody's noted.
Saudi Arabia is highly dependent on hydrocarbons to drive economic growth and to finance government expenditure. Oil and gas account for over 84% of goods exports and roughly 40% of GDP. They also provide around 62% of consolidated government revenues, said the ratings agency.
Moody's expects the current account deficit to widen to around 12% of GDP this year, driven by a further decline in oil exports and slower growth in non-oil exports due to dampened global demand. A slight recovery in oil prices and global growth, however, will lead to a narrowing of the deficit to around 7.5% of GDP by 2018.
