Cheap oil and the war in Syria has undermined the economy of Saudi Arabia
Riyadh, April 12. Saudi Arabia has dropped in credit rating by Fitch from "AA" to "AA-". The reason for the revision of the rating was the decrease in oil prices, tensions with Iran and a military operation in Yemen and Syria.
The effects of these factors can be observed already today. The budget deficit of the country last year increased by 12.5%, while all previous years in the state Treasury there was observed excess of income over expenditure. The pace of GDP growth in 2016, according to forecasts Fitch, will slow from 3.4% to 1.5%.
"Falling does not have serious negative consequences for fiscal and external balances of Saudi Arabia. We expect non-oil GDP will suffer because of the measures of fiscal consolidation and weakening confidence," Fitch was quoted by Reuters.
Recall that, according to some experts, the current oil crisis in part provoked the Saudi authorities, who began to sell raw materials at dumping prices to squeeze competitors from the market. In January, oil fell to a record 30 per barrel, but then settled at around 39-40 dollars.
