Fitch warns on deficit
- Fitch expects the deficit to fall to 9.2% in 2017 and 7.1% of GDP in 2018
- Deficit was 17.3% of GDP in 2016
- Government hopes to eliminate deficit by 2020
- Expects non-oil sector to growth 1.4% in 2017
- Views banking sector is strong and stable
- "Fitch believes rivalries within the royal family could become a source of instability."
- Fitch forecasts Brent average of $52.5 in 2017 and $55 in 2018
- Full statement from Fitch
"The downgrade of Saudi Arabia's Long-Term IDRs reflects the continued deterioration of public and external balance sheets, the significantly wider than expected fiscal deficit in 2016 and continued doubts about the extent to which the government's ambitious reform programme can be implemented," Fitch says.
They note that the political will for reform is very strong but that the scale of the agenda risks overwhelming the government's administrative capacity.
