DUBAI: Saudi Arabia’s economy will benefit from higher oil prices and its successful COVID-19 vaccine roll-out, ratings agency S&P Global has said as it affirmed the Kingdom’s stable outlook in its latest report. 

The semi-annual review from S&P affirmed the A-/Stable/A-2 sovereign rating of the Kingdom, attributing it to a positive post-pandemic performance as well as an improvement in oil sector dynamics. 

Growth is heavily observed in non-oil sectors, particularly in real estate where the government aims to drive national home ownership to 70 percent by 2030. 

Plastic and petrochemical exports also supported the Kingdom’s non-oil manufacturing, and consumer spending rose 3 percent in the first half of the year. 

The easing of tourism restrictions also supported other non-oil industries, including hotels and hospitality. 

There is also evidence of progress in the oil sector, which was heavily hit by the pandemic and the production cuts that came with it. Saudi Arabia’s GDP contracted by 4.1 percent last year, the biggest since 1987. 

But the S&P report said oil is getting back on track, particularly given the OPEC+ decision to restore and increase overall production by 400,000 barrels per day – 100,000 from Saudi Arabia. 

These indicators could drive economic growth from 2021 to 2024, the report said, especially given government efforts at fiscal control.