Ratings agency Fitch downgraded Saudi Arabia's debt rating to 'AA-' and maintained its "negative" outlook on the oil producer on Tuesday.
In a release , Fitch said the downgrade was driven by the fact that if oil prices stay at $35 per barrel this year and $45 per barrel in 2017 (which they assume), it would have "major negative implications for Saudi Arabia's fiscal and external balances."
Fitch noted that Saudi Arabia's deficit ballooned to 14.8% of gross domestic product last year from 2.3% in 2014, with the catalyst being the crash in oil prices.
It projects that the so-called deficit-to-GDP ratio would shrink only a bit this year, and a little more in 2017 if oil prices recover.
In February, S&P cut its rating to 'A-/A-2' from 'A+/A-1.'
More to come ...
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