Fitch Ratings affirmed investment grade ratings of six lenders in Saudi Arabia and revised their outlook to “stable” from “negative” as the Arab world’s largest economy recovers from the coronavirus pandemic. The ratings agency’s revision is based on authorities’ strong ability to support the kingdom’s banking system, given the large external reserves, Fitch said on Monday. The six banks whose credit ratings were affirmed at "BBB+" are Arab National Bank, Banque Saudi Fransi, Alinma bank, Saudi Investment Bank, Bank Aljazira and Gulf International Bank-Saudi Arabia. The revision also reflects a “long record of support for Saudi banks, irrespective of their size, franchise, funding structure and level of government ownership”, the ratings agency said. Earlier this month, Fitch <a href="https://www.thenationalnews.com/business/2021/07/17/fitch-revises-saudi-arabia-outlook-to-stable-and-affirms-a-rating/">revised Saudi Arabia’s outlook to “stable” from “negative</a>” and affirmed "A" sovereign rating on the back of higher oil prices and the government’s continued commitment to fiscal reforms. Saudi Arabia’s economy is <a href="https://www.thenationalnews.com/business/economy/2021/07/09/saudi-arabias-economy-to-grow-24-in-2021-propelled-by-non-oil-sector-imf-says/">forecast to grow by 2.4 per cent this year</a> and 4.8 per cent in 2022, driven by a strong rebound in the kingdom's non-oil sector and investment from its sovereign wealth fund, the Public Investment Fund, according to the International Monetary Fund. The kingdom's budget deficit is expected to narrow to 3.3 per cent of the gross domestic product in 2021, better than the 4.9 per cent target of the government budget, assuming oil prices average $63 a barrel this year, Fitch said this month. The ratings agency also sees “high contagion risk among domestic banks” due to the interconnected and smaller size of the market. “We believe this is an added incentive for the state to support any Saudi bank, if needed, to maintain market confidence and stability,” it said. Saudi Arabia's real non-oil GDP growth is projected to average 3 per cent from 2021 to 2023, according to Fitch, while the IMF forecasts that the kingdom's non-oil economy will grow by 4.3 per cent this year. Higher oil prices following Opec+ agreement and rising demand are expected to further support the economy. Brent, the international benchmark for two thirds of the world's oil, is currently trading above $74 a barrel. The PIF is also investing in the country to boost its economic growth. In January, the Saudi fund unveiled a five-year strategy with the aim of doubling its assets to $1.07 trillion and investing a minimum of $40 billion a year into the domestic economy until 2025. The investment is expected to create 1.8 million jobs and contribute $320bn to the kingdom's non-oil economy.