| The Saudi Arabian authorities’ prudent handling of the coronavirus crisis and oil price declines in 2020 has helped the country launch a spirited economic recovery. Indeed, real GDP growth in the fourth quarter of 2021 hit its highest level in years, as government stimulus efforts trickled down into the economy.
Ratings agencies are taking note. The S&P Global Rating revised the kingdom’s outlook to positive, followed by a similar move by Fitch Ratings, which also affirmed its A rating on the kingdom.
Fitch expects the kingdom to post record budget surpluses in 2022 for the first time since 2013, equal to 6.7%, assuming oil production of 10.7 million barrels per day (bpd) and crude prices of USD 100 per barrel. The ratings agency also expects budget surplus to grow 3.5% of GDP in 2023, assuming oil production of around 11.1 million bpd, and oil prices of USD 80 per barrel. Still, authorities are expected to practice fiscal restraint. “We assume that spending control will broadly persist despite higher oil prices, given uncertainty over long-term oil prices; commitment by the authorities to make the budget resilient to lower oil prices in line with the fiscal sustainability programme; and higher spending by the broader public sector to support economic growth and job creation,” Fitch said.
The kingdom’s social and economic reforms are also garnering praise from multilateral institutions. The International Monetary Fund lauded Saudi Arabia’s efforts to implement reforms that will expand the labour market by encouraging female participation in the labour force. Saudi Arabia also passed legislation that prohibits gender-based discrimination in employment, such as by ensuring equal remuneration, and allowing women to work in jobs deemed men-specific and prohibiting dismissal of women during pregnancy and maternity leave, in addition to equalising the retirement age. The kingdom also introduced legislation to prohibit gender-based
discrimination in access to credit, with the Real Estate Development Fund
providing subsidised mortgage loans to 73,000 women in 2020, to boost
female home ownership, and women usage of loans and mortgages. | 
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