Strong credit rating supporting Saudi financing needs 
Saudi Minister of Finance Mohammed Al-Jadaan approved the Kingdom’s annual financing plan for 2024.
The plan highlights the Kingdom’s debt developments and policies, debt market initiatives for 2023 and the funding plan for 2024.
Additionally, the plan includes the calendar of domestic Sukuk issuances under the Local Saudi Sukuk Issuance Program in the local currency.
The 2024 borrowing plan estimates that the financing needs for the Kingdom could reach SR86 billion ($22.9 billion) in 2024. This amount will encompass the payment of debts maturing in 2024 and financing this year’s fiscal budget deficit estimated at SR79 billion.
The total amount of financing needs for the Kingdom, both locally and internationally, is expected to reach SR1.115 trillion in 2024.
Aside from meeting the financing needs of the Kingdom, the National Debt Management Center seizes available opportunities in accordance with market conditions to seek additional financing for paying off debts maturing in the coming years.
Furthermore, the financing plan is committed to leveraging market opportunities to execute alternative government financing activities that promote economic growth, such as financing development and infrastructure projects.
I believe that the National Debt Management Center has performed remarkably in managing the Kingdom’s financing needs at fair pricing while wisely addressing all types of risks attached to any sovereign borrowing.
It is worth noting that the Kingdom raises its financing needs through the National Debt Management Center, which was created as an initiative of the Saudi Vision and the National Transformation Program in 2015.
The main task of the center is to secure the Kingdom’s financing needs with optimum pricing available in both local and international debt markets in the short, medium and long term.
Also, the center manages risks associated with the Kingdom’s borrowing, such as liquidity, currency exchange, price fluctuation, refinancing and hedging.
It is worth noting that the center takes calculated risks that strictly adhere to the Kingdom’s financial policies, ensuring Saudi Arabia’s ability to access different international financial markets at fair pricing.
The Kingdom’s debt portfolio expanded by about SR60 billion in 2023, reaching SR1.05 billion. However, despite this increase, the total debt represents 25.4 percent of GDP, which is still below the targeted ratio of 30 percent.
The strong credit rating of the Kingdom has positively reflected on its ability to raise financing at fair pricing.
Fitch has upgraded the Kingdom’s credit rating to “A+” with a stable outlook, while Moody’s and Standard & Poor’s have affirmed the Kingdom’s credit rating at “A1” and “A,” respectively, with a stable outlook.
Due to the Kingdom’s strong credit ratings, a $10 billion and a $6 billion bond issuance were oversubscribed by 3.8 and 4.5 times, respectively, in 2023.
I believe that the National Debt Management Center has performed remarkably in managing the Kingdom’s financing needs at fair pricing while wisely addressing all types of risks attached to any sovereign borrowing.
The Kingdom’s remarkable management of its financing needs has earned it the respect of international lenders globally and credit rating agencies as well.
• Talat Zaki Hafiz is an economist and financial analyst. X: @TalatHafiz
