DUBAI: Ratings agency Fitch on Wednesday upgraded Saudi Arabia’s credit rating to ‘A+’ from ‘A’, citing the Gulf state’s robust fiscal and external balance sheets, including a favourable debt-to-GDP ratio and strong sovereign net foreign assets.

The upgrade comes just days after Saudi Arabia, the world’s top crude exporter, announced surprise oil production cuts starting in May, along with other members of the OPEC+ alliance, which sent global oil prices soaring.

Oil revenue will account for about 60% of total budget revenue in 2023-2024, according to Fitch, despite a major government push towards developing the non-oil sectors of the economy.

“The upgrade also assumes ongoing commitment to gradual progress with fiscal, economic and governance reforms,” Fitch said.

“Oil dependence, weak World Bank governance indicators and vulnerability to geopolitical shocks remain relative weaknesses, although there are some indications of improvement in these factors,” it said, adding that Saudi Arabia’s fiscal breakeven price last year was $86/barrel.

Brent crude was trading above $85/barrel on Wednesday, days after Sunday’s oil production cuts were announced, when it was close to $80/barrel.

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The kingdom recorded a budget surplus of 103.9 billion riyals ($27.68 billion) in 2022, its first in almost a decade, as higher oil prices boosted government revenues by 31%. Fitch said the outlook on Saudi Arabia’s rating was “stable”.