RIYADH: Saudi Arabia's GDP is expected to grow at the fastest rate in ten years to 7.5 percent in 2022, according to credit rating agency S&P, as the country slowly recovers from the pandemic.

S&P also upgraded Saudi Arabia's outlook to positive and the Kingdom's short- and long-term foreign and local currency sovereign credit ratings to A-/A-2.

According to the S&P report, the Kingdom's state budget surplus is expected to be around 6.3 percent in 2022.

The credit rating agency further said the positive outlook reflects the country's strong GDP growth, sound fiscal policies and government reforms aimed at diversifying the economy, which has been heavily dependent on oil for several decades.

According to S&P, the productive capacity of the Saudi economy is expected to increase in the long run as a result of the development of general finances and significant economic reforms.

The agency said there would be no significant increase in sovereign debt costs in the Kingdom as most of the public debt portfolio is fixed rate.

According to the S&P, Saudi Arabia's inflation is relatively low compared to its peers, and is likely to remain so as the government subsidizes fuel and food prices while tying the local currency to the relatively strong US dollar.

As the economy recovers from the pandemic, non-oil sector growth is bolstered by strong services growth. The economy also benefits from large public investment projects funded by large-scale public investment funds and the National Development Fund, according to S&P.

Saudi Arabia's annual inflation rate rose to 3% in August, up from 2.7 percent in July, according to the General Authority for Statistics. The rise in the Consumer Price Index is driven by a four per cent increase in the prices of food and beverages in August.

Due to their high relative importance in the Saudi consumer basket, food and beverage prices were the main drivers of inflation rates in August 2022, with a weight of 18.8 percent, according to GASAT in a press release.

Earlier in June, Moody's Investors Service reaffirmed Saudi Arabia's rating of 'A1' with a stable outlook, mainly due to the government's fiscal policy effectiveness.

According to Moody's, the Kingdom's GDP will grow at a 5% annual rate between 2021 and 2023.

Saudi Arabia surpasses Russia in selling oil to India, Iran still at top

Man did such an act in Mecca Masjid, ruckus created

Limited edition of Audi Q7 launched at Rs 88.08 lakh in India