DUBAI (Reuters) – S&P Global (NYSE:) Ratings on Tuesday affirmed Saudi Arabia’s A- (minus) credit rating with a stable outlook, expecting a rebound in growth through 2024 driven by higher oil prices, eased OPEC production quotas and a large vaccine rollout in the kingdom.

After the COVID-19 pandemic weighed on the economy, Saudi Arabia has returned to ambitious investment projects linked to its strategy of weaning the economy off oil, S&P said. Public Investment Fund (the kingdom’s sovereign wealth funds) and other entities are making major investments in oil and non-oil industries.

According to the rating agency, Saudi Arabia’s deficit will drop from 11.2% in 2017 to 4.3% by 2021. It is expected that Saudi Arabia will average 5.7% growth between 2018 and 2024. The real GDP growth rate is 2.4%, after a decrease of 4.1% between 2020 and 2021.

“In 2021, higher oil prices are being partially counterbalanced by constrained annual Saudi oil production volumes, which continue to be limited by an OPEC deal,” S&P said in a mid-year review.

However, the Saudi economy and oil sector will be supported by a gradual easing in quotas from 2021 to 2022.

Megaprojects such as the planned futuristic city Neom “will be driven forward”, although “funding pressures may impede their pace and some investors have raised questions over some of the projects’ potential profitability,” S&P said.

Gross debt is expected to continue to increase until 2024 as deficits are partly funded by public debt issuance, though Saudi Arabia will stay in a net asset position on its fiscal and external balances, S&P said. The average amount of current account payments will cover 15 months on average, so reserves between 2021-2024 should be sufficient.

A significant strengthening of net asset position or improvement in growth prospects could lead S&P to raise ratings, it said.

The agency stated that it could reduce its ratings in case of fiscal weakness, an erosion of government net assets beyond what we expect or sharp declines in sovereign’s external situation.

Ratings could be affected by a sustained increase in geopolitical or domestic instability, which poses a serious and persistent threat to the oil industry.

Geopolitical risks, especially concerning Iran and Yemen, remain, but recent overtures could help improve tensions, S&P said.