(Adds detail, Fitch quotes)
DUBAI, April 5 (Reuters) - Ratings agency Fitch on
Wednesday upgraded Saudi Arabia's credit rating to 'A+' from
'A', citing the Gulf state's robust fiscal and external balance
sheets, including a favourable debt-to-GDP ratio and strong
sovereign net foreign assets.
The upgrade comes just days after Saudi Arabia, the world's
top crude exporter, announced surprise oil production cuts
starting in May, along with other members of the OPEC+ alliance,
which sent global oil prices soaring.
Oil revenue will account for about 60% of total budget
revenue in 2023-2024, according to Fitch, despite a major
government push towards developing the non-oil sectors of the
economy.
"The upgrade also assumes ongoing commitment to gradual
progress with fiscal, economic and governance reforms," Fitch
said.
"Oil dependence, weak World Bank governance indicators and
vulnerability to geopolitical shocks remain relative weaknesses,
although there are some indications of improvement in these
factors," it said, adding that Saudi Arabia's fiscal breakeven
price last year was $86/barrel.
Brent crude was trading above $85/barrel on Wednesday, days
after Sunday's oil production cuts were announced, when it was
close to $80/barrel.
The kingdom recorded a budget surplus of 103.9 billion
riyals ($27.68 billion) in 2022, its first in almost a decade,
as higher oil prices boosted government revenues by 31%.
Fitch said the outlook on Saudi Arabia's rating was
"stable".
(Reporting by Lavanya Ahire in Bengaluru and Rachna Uppal in
Dubai, Editing by Louise Heavens & Shri Navaratnam)
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