Saudi PIF Investments to Spur Corporate Credit Growth, S&P Says
(Bloomberg) -- Investments by Saudi Arabia’s sovereign wealth fund will likely fuel corporate credit growth this year, according to S&P Global Ratings.
The Public Investment Fund’s goals, particularly in sectors related to construction, are expected to “offset the gradual lifting” of government support during the pandemic, analysts including Roman Rybalkin wrote Monday.
Saudi Arabia’s $400 billion fund is increasingly playing a major role in diversifying the economy away from oil and developing sectors such as tourism. Over the next two years, its investments in the local economy are set to amount to more than 10% of government expenditure for 2021.
Domestic private-sector credit in the Arab world’s largest economy will likely exceed 80% of gross domestic product this year and next, compared with an earlier estimate of 75%, according to S&P.
More from the report:
- Mortgage portfolios are seen expanding by about 30% annually over the next few years.
- Credit growth seen at 10% in 2021 and 2022, indicating that economic imbalances are in “the expansionary phase.”
- Saudi Crown Prince Sees More Aramco Share Sales to Boost PIF
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