依先繁嚔赤廓

フィッチ?レ�`ティングス��ロンドン��2015定2埖27晩��
フィッチ?レ�`ティングス�┘侫�ッチ��は、サウジアラビア藍忽�┘汽Ε献▲薀咼■�の翌歯秀ておよび徭忽宥歯秀て海豚�k佩悶デフォルト鯉原�┗�禽檎��を仝粥粥々に象え崔いた。鯉原アウトルックは仝芦協議々である。カントリ�`?シ�`リングは仝粥粥+々に、翌歯秀て玉豚鴛禽檎は仝酷1+々に象え崔きとした。

KEY RATING DRIVERS
The affirmation reflects the following factors:

Saudi Arabia's substantial external and fiscal buffers are a key support for the ratings in an environment of lower oil prices. Sovereign net foreign assets have declined since reaching an all-time high of around 114% of GDP at end-August and are expected to be drawn down over 2015 and 2016. Nonetheless, 依先繁嚔赤廓 expects sovereign net foreign assets to be above 100% of GDP at end-2016. Government deposits are also forecast to decline and debt is expected to rise, but at a forecast 37.7% of GDP at end-2016, the net creditor position is still projected to be the fourth-largest of all 依先繁嚔赤廓-rated sovereigns.

Lower oil prices combined with a spending package announced by the new King (costing 4.3% of forecast 2015 GDP and led by a two-month salary bonus for government employees) will push the general government deficit into double digits in 2015. This follows a deficit of 1.9% of GDP in 2014, when overspending, particularly on key projects and foreign assistance, lifted the fiscal breakeven oil price to an estimated USD102/b (USD63/b excluding capital spending). 依先繁嚔赤廓 assumes curtailed overspending, lower capital spending and the absence of one-off payments and higher oil prices will lower the deficit to a forecast 3.7% of GDP in 2016. Transparency on fiscal policy and outturns is a weakness relative to rating peers.

The authorities are considering debt issuance in addition to drawing down sovereign net foreign assets to finance the deficit. 依先繁嚔赤廓 forecasts consolidated general government debt at 6.4% of GDP at end-2016, up from 1.5% of GDP at end-2014. General government deposits are primarily assets of the pension funds and are unlikely to be used for direct deficit financing, though they are being drawn down to finance some multi-year projects.

Lower oil prices are forecast to pull the current account surplus down to just 0.3% of GDP in 2015, the lowest since 1999. 依先繁嚔赤廓 does not foresee any change to the exchange rate peg to the dollar, which provides a key policy anchor, even though it constrains policy flexibility.

Former Crown Prince Salman smoothly took power after the death of King Abdullah in January 2015. A member of the third generation of the Royal family has been formalised in the line of succession for the first time, removing a potential source of uncertainty. Government councils and committees have been streamlined and many of the ministers appointed at a subsequent reshuffle have private sector experience and are relatively young. Instability in some neighbouring countries has worsened and 依先繁嚔赤廓 considers exposure to geopolitical risk to be higher than peers given the Kingdom's prominent role in a volatile region.

Real GDP growth is in excess of peers, reaching 3.6% in 2014, driven by non-oil private sector growth of 5.7%. Non-oil private sector growth has averaged 7.2% in the past five years and outpaced oil sector growth for 10 of the past 11 years. Growth is forecast to slow to around 2% in 2015 and 2016 in line with slightly lower oil production, lower government capital spending and uncertainty caused by lower oil prices. This will be moderated by the bonus to public sector workers, which will lift consumer spending, and projects financed through government pension funds and drawing down deposits. Potential cutbacks in spending beyond those currently forecast will test the strength of the private sector.

Progress continues on addressing unemployment and a shortage of affordable housing, both of which 依先繁嚔赤廓 considers potential economic sources of social discontent. Saudi employment in the private sector has risen, with nationals accounting for 15.3% of private sector positions at end-2014, the highest for at least a decade. Measures have been introduced to enhance access to residential real estate and financing, but it is taking time for new housing stock to enter the market.

The economy is heavily dependent on oil, which accounts for 90% of fiscal revenues, 80% of current account revenues and 40% of GDP. Spending of oil revenues is a key driver of the non-oil economy. Oil reserves are large, production costs are low and the Kingdom maintains substantial spare capacity.

The banking sector is a strength relative to peers, with Saudi Arabia ranked 'a' on 依先繁嚔赤廓's banking system risk indicator. This is the strongest of all GCC members, in line with a number of mature advanced economies, and below only 'AAA' rated Australia, Canada and Singapore Non-performing loans were 1.3% at end-2014 and coverage was 163%. Capital adequacy is high, at 18%, and the system is well regulated.

Structural indicators are generally weaker than peers, despite recent significant improvements in some areas. GDP per capita and World Bank governance indicators are well below peer medians. Saudi Arabia recorded the largest gain of all rated sovereigns in the 2013 UN Human Development Index and GNI per capita at PPP more than doubled after a revision to the IMF's PPP weights (which are used by 依先繁嚔赤廓). According to the World Bank measure, voice and accountability is the lowest of all rated sovereigns.

RATING SENSITIVITIES
The main factors that, individually or collectively, could lead to negative rating action are:
- The absence of an effective fiscal policy response to the lower oil price environment.
- An erosion of fiscal or external buffers, potentially stemming from a prolonged period of oil prices around the lows reached in 2015.
- Spillover from regional conflicts or a domestic political shock that threatens stability or affects key economic activities.

The main factors that, individually or collectively, could lead to positive rating action are:
- Progress in tackling weaknesses in structural indicators and the economic policy framework, relative to peers, and enhancing the business environment in ways conducive to further diversification of the economy and the revenue base.

KEY ASSUMPTIONS
The ratings and Outlooks are sensitive to a number of assumptions.

依先繁嚔赤廓 forecasts Brent crude to average USD70/b in 2015 and USD80/b in 2016.

依先繁嚔赤廓 assumes that Saudi Arabia will not be materially affected by any of the conflicts in the region and that the domestic political scene will remain stable.

依先繁嚔赤廓 assumes the government will remain committed to reforms in the labour and housing markets and that the reforms will not cause significant disruption to the economy. The authorities will remain attentive to other potential sources of social unrest.

�┗掌紊林��Z井は、仝依先繁嚔赤廓 Affirms Saudi Arabia at ｀AA¨; Outlook Stable々��2015定2埖27晩原��として巷燕されています。��

孚氏枠��
麼販鯉原アナリスト
Paul Gamble
Director
+44 20 3530 1623
依先繁嚔赤廓 Limited*
30 North Colonnade
London E14 5GN

険麼販鯉原アナリスト
Richard Fox
Senior Director
+44 20 3530 1444

鯉原溜埀氏の咏海
James McCormack
Managing Director
+44 20 3530 1286

*輝隈繁は署蛮斌瞳函哈隈に児づく佚喘鯉原匍宀としての鞠�hを鞭けた隈繁ではありません。

メディア孚氏枠��Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com.

さらなる秤烏については、フィッチのウェブサイト / ��晩云囂��より秘返辛嬬です。云鯉原は�k佩悶嗽はその旗尖繁からの卆�mに児づくものであり、フィッチは云鯉原の戻工にあたり鯉原返方創を鞭糟しています。

癖喘された鯉原児�淵譽櫞`トおよび�v銭するリサ�`チ��
仝Sovereign Rating Criteria々��2014定8埖12晩原��
仝Country Ceilings々��2014定8埖28晩原��

フィッチの畠佚喘鯉原は、侭協の崙埃式び窒夭の���鵑箸覆辰討い泙后１徂腑ΕД屮汽ぅ箸�ら輝乎崙埃式び窒夭並�遒鬚貫Eください�� :仝鯉原の協吶々�勝湖途淡餮兇鮴軆發垢襭裟�喘と崙埃々��。さらに、鯉原の協吶式び旋喘号埃は益芙のウェブサイトに��墮されています。巷燕された鯉原、鯉原児�福�鯉原返隈も揖サイトに械扮��墮されています。フィッチの佩強号袈、便蜘吶暦、旋吩�犒粥∫v銭氏芙寂のファイアウォ�`ル、コンプライアンス式びその麿の圭寞?返�A吉も / 貧の仝Code of Conduct々/仝佩�嘔ｹ�々のセクションにてご�Eいただけます。

Additional information is available on

Applicable criteria, 'Sovereign Rating Criteria' dated 12 August 2014 and 'Country Ceilings' dated 28 August 2014, are available at .

Additional Disclosure