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Arab News
28-06-2025
- Business
- Arab News
IMF highlights Saudi Arabia's economic, fiscal progress
As part of the 2025 Article IV consultation with Saudi Arabia, the International Monetary Fund released a concluding statement summarizing its preliminary findings following the recent mission to the Kingdom. The IMF commended the significant progress in Saudi Arabia's ambitious economic transformation, highlighting the impact of far-reaching fiscal and macroeconomic policies, along with comprehensive reforms to fiscal and business regulations, which have driven strong growth in the non-oil sector. It emphasized the Kingdom's strong economic and financial position, supported by the continued success of its economic plans and fiscal policies in maintaining financial stability and fostering growth — despite ongoing geopolitical tensions, trade disruptions, and global uncertainty. The IMF also highlighted that Saudi Arabia's economy has demonstrated strong resilience to shocks, with expanding non-oil economic activities, contained inflation, and unemployment at record-low levels. Although lower oil revenues and investment-related imports have resulted in twin deficits, external and fiscal buffers remain strong. Maintaining a higher-than-budgeted fiscal stance in 2025 is appropriate to avoid procyclical tightening that could amplify the growth impact of lower oil prices. Managing robust credit growth and resulting funding pressures will be critical to safeguarding systemic financial stability. Given heightened global uncertainty, sustained momentum on structural reforms remains essential to support non-oil growth and advance economic diversification. The IMF's statement noted that non-oil real gross domestic product grew by 4.2 percent in 2024, primarily driven by private consumption and non-oil private investment, with retail, hospitality, and construction leading the growth. The labor market maintained strong momentum, driving unemployment to a historic low of 7 percent in 2024, surpassing the original Vision 2030 target, which has since been revised down to 5 percent. The labor market showed broad-based improvements, with youth and female unemployment rates halving over the past four years. Despite a slight rise to 2.3 percent in April 2025, headline inflation remains low, supported by elevated real interest rates. The current account shifted to a narrow deficit, moving from a surplus of 2.9 percent of GDP in 2023 to a deficit of 0.5 percent in 2024. This mainly reflects a decline in oil export proceeds, higher imports of machinery and equipment, and stronger remittance outflows — factors that more than offset a surge in tourism inflows. The current account deficit has been financed through external borrowing and reduced FX asset accumulation. As a result, the Saudi Central Bank's net foreign asset holdings stabilized at $415 billion by end-2024 — equivalent to 15 months of imports and 187 percent of the IMF's reserve adequacy metric. Regarding the Kingdom's economic outlook and risks, the IMF highlighted that robust domestic demand, including government-led projects, will continue to drive growth despite heightened global uncertainty and a weakened commodity price outlook. Non-oil real GDP growth is projected at 3.4 percent in 2025, about 0.8 percentage points lower than in 2024. This reflects ongoing Vision 2030 projects through public and private investment, as well as strong credit growth, which will help sustain domestic demand and mitigate the impact of lower oil prices. The direct impact of rising global trade tensions is limited, as oil products — making up 78 percent of Saudi Arabia's goods exports to the US in 2024 — are exempt from US tariffs, while non-oil exports to the US account for only 3.4 percent of Saudi Arabia's total non-oil exports. Inflation is expected to remain anchored around 2 percent, supported by a credible peg to the US dollar, domestic subsidies, and an elastic supply of expatriate labor, despite a projected moderate positive output gap over the medium term. Imported inflation from increased tariffs worldwide is expected to remain contained. Weaker oil demand, driven by heightened uncertainty, escalating global trade tensions, and deepening geoeconomic fragmentation, could dampen oil proceeds. I believe the IMF has recognized the unprecedented economic transformation underway in Saudi Arabia, praising the country's strong financial resources and the significant reforms implemented across various sectors, including public finance. It also highlighted the Kingdom's strong economic and financial position, supported by steady economic gains and sound fiscal strategies designed to preserve stability amid ongoing geopolitical tensions, trade disruptions, and global uncertainty. Despite public debt reaching 26.2 percent of GDP, the IMF noted it remains low by international standards, reflecting the Kingdom's solid fiscal performance and preparedness for potential future shocks. Recent investment initiatives — including the regulation enacted in February 2025 — are set to significantly enhance market liquidity and broaden shareholder participation in Saudi capital markets. In conclusion, I believe these economic and financial achievements highlighted in the IMF's preliminary findings underscore the far-reaching impact of ongoing reforms, reaffirming Saudi Arabia's sustained progress in expanding opportunities for its citizens and bolstering long-term economic resilience. • Talat Zaki Hafiz is an economist and financial analyst. X: @TalatHafiz
Zawya
26-06-2025
- Business
- Zawya
UAE among elite global economies with strong & stable sovereign ratings from the top three international credit rating agencies
The UAE is among the few countries worldwide with strong credit ratings from all three major international rating agencies Maktoum bin Mohammed: Confirmation of the strong sovereign rating reflects the strength of the UAE economy and the sustainability of its fiscal policies The UAE's strong ratings are the result of an integrated economic vision and effective government action Economic diversification and fiscal discipline reinforce international institutional confidence in the country Abu Dhabi - United Arab Emirates: The United Arab Emirates (UAE) Ministry of Finance announced that the world's top three credit rating agencies – Fitch Ratings (Fitch), S&P Global (S&P), and Moody's Investors Service (Moody's) – have assigned sovereign credit rating for the United Arab Emirates. This step reflects the continued international confidence in the strength of the UAE economy and the sustainability of its fiscal policies. S&P announced, on 17 June 2025, that it assigned the UAE's sovereign rating at 'AA' with a stable outlook. Moody's, in its annual review for 2025, affirmed the rating at 'Aa2' with a stable outlook. Fitch also affirmed the UAE's rating at 'AA-' with a stable outlook on 24 June 2025. This consensus by all three major global credit rating agencies highlights the UAE's advanced fiscal standing and strengthens its position among the few countries globally with strong sovereign credit ratings from all three top agencies. Integrated Government Performance On this occasion, His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister, and Minister of Finance, said: 'The affirmation of the UAE's strong sovereign rating by the world's top three international credit rating agencies, and their consensus on a stable outlook, reflects the deep-rooted international confidence in the resilience of our national economy and the efficiency of our fiscal policies. This is the result of a comprehensive economic vision led by His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE (may God protect him), and closely followed by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai (may God preserve him).' His Highness affirmed that the UAE continues to implement economic policies grounded in diversification, transparency, and fiscal discipline, with a strong focus on increasing non-oil revenues and achieving financial sustainability. This reflects the integrated performance of government entities and long-term strategic planning, which continue to reinforce the UAE's position as a flexible and credible global economic hub. He added: 'At the Ministry of Finance, we remain committed to working closely with all government entities to enhance the efficiency of resource management, develop productive sectors, and improve the country's investment appeal. The development of the sovereign yield curve for the dirham was a major milestone in enhancing market transparency, providing investors with a reliable benchmark for pricing dirham-denominated debt instruments. This strengthens the UAE's presence on the global economic map and reinforces its ability to confidently navigate regional and international changes and challenges — by expanding the investor base and enhancing the country's reputation as a reliable and attractive destination in global capital markets.' Sustainable Growth The ratings confirm the UAE's ability to diversify and boost non-oil revenues, maintain sound fiscal discipline, manage risks effectively, and uphold prudent fiscal policies. All of these factors have contributed positively to economic stability and sustained growth across various sectors. S&P's report reflects the agency's assessment of the UAE's strong financial position, in addition to the strength of the government's consolidated sovereign assets. The agency expects that regional geopolitical tensions will, overall, have a limited impact on the UAE, given the country's large sovereign wealth and track record of internal stability. Moody's report highlights the UAE government's continued efforts to expand and diversify non-oil revenue sources, support the development of non-oil sectors, and enhance the country's appeal to foreign investors and skilled talent. Despite persistent geopolitical tensions in the region, the UAE's effective policy frameworks help mitigate these challenges through advancing economic diversification. Fitch's report noted the elevated geopolitical risks in the region, while affirming the UAE's strong ability to withstand short-term disruptions, supported by its substantial fiscal and external buffers. This achievement is yet another testament to the UAE's continued success in striking a balance between fiscal stability and economic growth. It further reinforces international investor confidence and affirms the UAE's status as a secure and stable destination for business and investment.
Gulf Business
26-06-2025
- Business
- Gulf Business
UAE secures top sovereign credit ratings from major agencies
The UAE has received strong sovereign credit ratings from Fitch Ratings, S&P Global, and Moody's Investors Service, reflecting international confidence in its economic strength and fiscal policies, according to the state news agency WAM. S&P Global assigned the UAE a sovereign rating of 'AA' with a stable outlook on June 17. Moody's, in its annual review for 2025, affirmed the rating at 'Aa2' with a stable outlook. This consensus from all three major global credit rating agencies underscores the UAE's robust fiscal standing, positioning it among a select group of countries globally with strong sovereign credit ratings across the board. According to the report, Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister, and Minister of Finance, stated that the ratings affirm 'deep-rooted international confidence in the resilience of our national economy and the efficiency of our fiscal policies.' He attributed this to a comprehensive economic vision led by UAE President Sheikh Mohamed bin Zayed Al Nahyan and supported by Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai. Sheikh Maktoum reaffirmed the UAE's commitment to implementing economic policies focused on diversification, transparency, and fiscal discipline, with an emphasis on increasing non-oil revenues and achieving financial sustainability. He noted that this reflects the integrated performance of government entities and long-term strategic planning, reinforcing the UAE's position as a flexible and credible global economic hub. He added that the Ministry of Finance remains committed to collaborating with government entities to enhance resource management efficiency, develop productive sectors, and improve the country's investment appeal. The development of the sovereign yield curve for the UAE dirham was highlighted as a significant milestone, enhancing market transparency and providing a reliable benchmark for pricing dirham-denominated debt instruments. This, he stated, strengthens the UAE's global economic presence and its ability to navigate regional and international challenges by expanding the investor base and enhancing its reputation as a reliable and attractive destination in global capital markets. Ratings confirm UAE's ability to diversify and drive non-oil sectors The ratings confirm the UAE's capacity to diversify and boost non-oil revenues, maintain sound fiscal discipline, manage risks effectively, and uphold prudent fiscal policies. These factors have positively contributed to economic stability and sustained growth across various sectors. S&P's report specifically cited the UAE's strong financial position and the strength of the government's consolidated sovereign assets. The agency anticipates that regional geopolitical tensions will have a limited overall impact on the UAE, citing the country's substantial sovereign wealth and consistent internal stability. Moody's report underscored the UAE government's ongoing efforts to expand and diversify non-oil revenue sources, support the development of non-oil sectors, and enhance the country's attractiveness to foreign investors and skilled talent. Despite persistent regional geopolitical tensions, the report noted that the UAE's effective policy frameworks help mitigate these challenges through ongoing economic diversification. Fitch's report, while acknowledging elevated geopolitical risks in the region, affirmed the This achievement serves as further evidence of the UAE's continued success in balancing fiscal stability with economic growth, reinforcing international investor confidence and affirming the UAE's status as a secure and stable destination for business and investment.
Zawya
26-06-2025
- Business
- Zawya
UAE among elite global economies with strong & stable sovereign ratings
ABU DHABI: The United Arab Emirates (UAE) Ministry of Finance announced that the world's top three credit rating agencies – Fitch Ratings (Fitch), S&P Global (S&P), and Moody's Investors Service (Moody's) – have assigned sovereign credit rating for the United Arab Emirates. This step reflects the continued international confidence in the strength of the UAE economy and the sustainability of its fiscal policies. S&P announced, on 17 June 2025, that it assigned the UAE's sovereign rating at 'AA' with a stable outlook. Moody's, in its annual review for 2025, affirmed the rating at 'Aa2' with a stable outlook. Fitch also affirmed the UAE's rating at 'AA-' with a stable outlook on 24 June 2025. This consensus by all three major global credit rating agencies highlights the UAE's advanced fiscal standing and strengthens its position among the few countries globally with strong sovereign credit ratings from all three top agencies. On this occasion, H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister, and Minister of Finance, said: 'The affirmation of the UAE's strong sovereign rating by the world's top three international credit rating agencies, and their consensus on a stable outlook, reflects the deep-rooted international confidence in the resilience of our national economy and the efficiency of our fiscal policies. This is the result of a comprehensive economic vision led by His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE, and closely followed by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai.' H.H. affirmed that the UAE continues to implement economic policies grounded in diversification, transparency, and fiscal discipline, with a strong focus on increasing non-oil revenues and achieving financial sustainability. This reflects the integrated performance of government entities and long-term strategic planning, which continue to reinforce the UAE's position as a flexible and credible global economic hub. He added: 'At the Ministry of Finance, we remain committed to working closely with all government entities to enhance the efficiency of resource management, develop productive sectors, and improve the country's investment appeal. The development of the sovereign yield curve for the dirham was a major milestone in enhancing market transparency, providing investors with a reliable benchmark for pricing dirham-denominated debt instruments. This strengthens the UAE's presence on the global economic map and reinforces its ability to confidently navigate regional and international changes and challenges — by expanding the investor base and enhancing the country's reputation as a reliable and attractive destination in global capital markets.' The ratings confirm the UAE's ability to diversify and boost non-oil revenues, maintain sound fiscal discipline, manage risks effectively, and uphold prudent fiscal policies. All of these factors have contributed positively to economic stability and sustained growth across various sectors. S&P's report reflects the agency's assessment of the UAE's strong financial position, in addition to the strength of the government's consolidated sovereign assets. The agency expects that regional geopolitical tensions will, overall, have a limited impact on the UAE, given the country's large sovereign wealth and track record of internal stability. Moody's report highlights the UAE government's continued efforts to expand and diversify non-oil revenue sources, support the development of non-oil sectors, and enhance the country's appeal to foreign investors and skilled talent. Despite persistent geopolitical tensions in the region, the UAE's effective policy frameworks help mitigate these challenges through advancing economic diversification. Fitch's report noted the elevated geopolitical risks in the region, while affirming the UAE's strong ability to withstand short-term disruptions, supported by its substantial fiscal and external buffers. This achievement is yet another testament to the UAE's continued success in striking a balance between fiscal stability and economic growth. It further reinforces international investor confidence and affirms the UAE's status as a secure and stable destination for business and investment.
