RIYADH: Credit rating agency Moody’s has changed the outlook on the Saudi government from negative to stable.

The agency predicted the Saudi economy will return to positive growth in 2021, and the current account level will return to a surplus as the fiscal deficit shrinks in 2021, accompanied by a reduction in the level of debt in the medium term. Moody’s also praised the effectiveness of the Kingdom’s fiscal policies, evidenced by policy responses in periods of both low and high oil prices.

A stable outlook suggests the financial position and net external assets of the Kingdom remain strong enough to support its credit rating.

The agency also noted that one of the key pillars of the change in its outlook was the government’s commitment to medium-term fiscal reforms, including the Sustainability Program which aims to further enhance fiscal discipline, improve effectiveness of public finance management, and support the rebuilding of fiscal buffers.

This will also better align the framework with national expenditure priorities. The financial sustainability program framework between 2015-2020 contributed to the growth of non-oil revenues from less than 10% in 2015 to more than 18% in 2020, and the reduction of non-interest expenditures from 56% in 2015 to 53% in 2020.