S&P revises Saudi Arabia's outlook to positive on advancing non-oil economy

S&P Global Ratings revised Saudi Arabia's forecast to positive from stable on Friday, citing strong non-oil growth outlook and economic resilience.

The ratings agency said the positive outlook reflects the Saudi government's potential to bring in more reforms and investments, contributing to the development of non-oil economy.

The upgrade also reflects the country's economic resilience against ongoing volatility stemming from the hydrocarbon sector.

"We expect to see an acceleration of investments to develop newer industries, such as tourism, and diversify the economy away from its primary reliance on the upstream hydrocarbon sector," S&P said.

Saudi Arabia, the world's top oil exporter, had announced an economic overhaul, known as Vision 2030, to end its reliance on oil for further economic growth.

S&P says continued execution of Vision 2030 initiatives will support strong non-oil growth over the medium term.

However, the hydrocarbon sector and national oil company Aramco will continue to play an important role in driving oil-linked economy to the kingdom.

Inflation has remained relatively low in Saudi Arabia compared to global levels. S&P expects inflation to remain steady and that interest rates will broadly move in tandem with the U.S. Federal Reserve rates.

S&P also affirmed Saudi Arabia's ratings at "A/A-1."