The tourism sector currently accounts for about 4% of Saudi Arabia’s gross domestic product (GDP), and was a highly promising and productive sector in 2023, Al-Eqtisadiah newspaper quoted Zahabia Gupta, Head of Sovereign Ratings at S&P Global Ratings, as saying. She affirmed that it is one of the new factors supporting the Kingdom’s credit rating.
Gupta explained that S&P’s sovereign ratings are based on five main factors: institutional assessment, economic assessment, external assessment, fiscal performance and flexibility, debt level, and monetary assessment.
She noted that the Kingdom’s non-oil GDP share currently stands at around 70% (including government spending) and 50% without it. When Vision 2030 was announced, the non-oil GDP share stood at 65% and 45%, respectively. The Saudi economy is undergoing a significant and rapid economic and social transformation under the Vision, said Gupta, expecting investments to accelerate developing new industries such as tourism, helping to diversify the economy away from hydrocarbons.
Moreover, increasing oil volumes from 2025 and strong growth in the non-oil sector will support medium-term growth prospects. Gupta expects a recovery in construction activities for infrastructure projects and the services sector, driven by consumer demand and an expanding workforce.
She also predicts an average growth rate of 4.3% between 2025 and 2027. However, lower oil prices or production, due to weak Chinese demand or other supply factors, could heighten funding pressures and execution risks for Vision 2030.
According to data available on Argaam, S&P recently affirmed Saudi Arabia’s long- and short-term foreign and local currency unsolicited sovereign credit ratings at “A/A-1,” revising outlook from “Stable” to “Positive”.
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