Robust and strengthening government finances, underpinned by fiscal discipline and a sharp reduction in central government debt. Strong external liquidity, with foreign exchange reserves and liquid external assets in 2006 sufficient to cover 28 months of current account payments (including private transfers). Good progress in implementing structural economic reforms. An open economy with a stable exchange rate, low inflation, and a sound banking system. A narrow economy compared with higher-rated peers, with a strong economic and fiscal dependence on the hydrocarbons sector. A relatively large state sector, providing the bulk of domestic investment and employment. High geopolitical risks. The ratings on the Kingdom of Saudi Arabia primarily reflect the government's rapidly strengthening external and fiscal positions. Driven by record oil
