Moody’s cuts credit ratings of Saudi Arabia, Oman and Bahrain
The agency cut Saudi Arabia’s long-term issuer ratings by one level to A1 from AA3 while maintaining the country’s outlook at stable. Oman’s credit rating was also downgraded one level to BAA1, while Bahrain’s rating was reduced to BA2.
Retreating energy prices have affected oil exporting Gulf economies, which utilize the money from oil sales in infrastructure projects to respond the needs of a fast-growing population. Some of these countries cut spending, raised taxes, reduced subsidies or took loans in order to cope with budgetary shortfalls occasioned by lower oil prices.
As for Saudi Arabia, the country’s budget deficit reached nearly $100 billion in 2015 due to a drop in oil revenues while its foreign reserves also dropped by over $155 billion to below $600 billion in March, government data revealed. Moody’s expects foreign reserves to keep going down to $460 billion through 2019. On the other hand, Saudi Arabia took a loan worth $10 billion from international banks last month and is likely to borrow more this year. The agency said that Saudi Arabia’s efforts to diversify its economy would help improve its creditworthiness if they succeed.
Standard & Poor’s had previously downgraded Saudi Arabia’s rating to A- in February, citing lower oil prices.
More free plastics newsPlastic resin (PP, LDPE, LLDPE ,HDPE, PVC, GPS; HIPS, PET, ABS) prices, polymer market trends, and more...
- Indian PVC players expect bullish trend to taper off for August
- Local PP, PE offers for July track global uptrend in Saudi Arabia
- Initial ABS prices for July see larger increases than PS in Europe
- Supply constraints spark stronger PE trend than PP in global markets
- ABS, PS uptrend falters in China after H1 2020 ends at multi-month highs
- Stats: China’s total PP imports spike in May; Vietnam and India’s rising shares shine out
- Tight supply drives HDPE, LLDPE gains in Southeast Asia
- European PE markets set for 2nd bullish month on rising costs
- Turkey’s PP and PE markets propelled to a firm start to H2 despite vulnerable conditions
- Asian PVC sees V-shaped recovery in Q2, what will Q3 bring?