Moody’s downgrades Saudi Arabia’s credit outlook to “negative” from “stable”

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Moody’s downgrades Saudi Arabia’s credit outlook to “negative” from “stable”

Late on Friday, the 1st of May 2020, the New York City-based American global credit rating agency, Moody’s, often considered as one of the top three sovereign credit rating agencies alongside Fitch and S&P, had slashed the OPEC-kingpin Saudi Arabia’s sovereign credit rating outlook to “negative” from “stable” citing higher financial risks alongside a jawdropping widening in budget deficit due to the latest collapse in the crude oil market and a deluge of uncertainty regarding the Saudi Government’s ability to neutralize its debts by easing oil sector revenue losses.

Nonetheless, the rating agency, had kept the world’s largest crude oil exporter, Saud Arabia’s sovereign credit rating unchanged at “A1” adding that the Saudi Government’s balance sheet would unlikely to deteriorate further due to a moderate level of debts alongside some foreign liquidity buffers.

Besides, the Friday’s (May 1st) Moody’s report that had downgraded the oil-dependent Kingdom-nation’s credit rating outlook to negative, came forth as global demand of crude oil had fallen more than a third since March 21st due to a rapid acceleration of the pandemic outbreak.

Meanwhile, referring that the Mideast oil mogul would unlikely to fulfil its fiscal targets this year due to a multi-year low oil price, Moody’s said in a statement on Friday (May 1st), “The plans to diversify Saudi Arabia’s economy away from oil could lift the country’s medium- to long-term growth potential. ”