Moody’s upgrades Saudi Arabia’s rating on economic diversification efforts

(Reuters) – Global credit ratings agency Moody’s (NYSE:) upgraded Saudi Arabia’s rating to “Aa3” from “A1” on Friday, citing the country’s efforts to diversify beyond its oil economy.

The world’s leading oil exporter is investing billions of dollars to achieve its Vision 2030 plan, which focuses on reducing its reliance on oil and spending more on infrastructure to boost industries like tourism, sports and manufacturing.

Saudi Arabia is also working to attract more outside investment to ensure its ambitious plans stay on track.

Last month, the country’s investment minister sought to reassure investors at a conference in Riyadh that Saudi remains lucrative for investment despite a year marked by regional conflict.

With lower oil prices and production, the government’s earnings have decreased. As a result, the kingdom is rethinking its spending, which means some Vision 2030 projects will be delayed or scaled back, while others would get more priority.

“Continued progress will, over time, further reduce Saudi Arabia’s exposure to oil market developments and long-term carbon transition,” Moody’s said in a statement.

The rating agency also revised the country’s outlook to stable from positive, citing uncertainty regarding global economic conditions and oil market developments.

In September, S&P revised Saudi Arabia’s outlook to positive from stable on the back of strong non-oil growth outlook and economic resilience.