(Reuters) - Ratings agency Fitch revised Saudi Arabia’s outlook on Thursday to stable from negative, citing significantly higher oil prices and continued government commitment to adjusting its finances. The world’s largest oil exporter was hit last year by the twin shock of the COVID-19 pandemic and record-low oil prices, but a rebound in crude demand and the easing of coronavirus restrictions have lifted the economy in recent months. Fitch maintained Saudi Arabia’s sovereign rating at ‘A’. “The outlook revision reflects prospects for a smaller deterioration in key sovereign balance-sheet metrics than at the time of the previous review, owing to significantly higher oil prices and continued government commitment to fiscal consolidation,” it said. Saudi Arabia’s budget deficit jumped to 11.2% of gross domestic product last year from 4.5% in 2019, but Fitch said the widening was less pronounced than after the 2014-2015 oil price shock due to Saudi fiscal reforms. The kingdom last year introduced austerity measures such as the tripling of a value-added tax and the removal of a cost of living allowance. It also transferred $40 billion from the central bank to the Public Investment Fund - the sovereign wealth fund at the centre of plans to transform the economy - to spur investment. Assuming Brent prices average $63 per barrel this year, Fitch forecast the budget deficit to narrow to 3.3% of GDP this year, better than the 4.9% deficit projected by the government. Net foreign assets at the central bank recently dropped to about $433 billion, their lowest in more than a decade. Fitch expects reserves at the Saudi central bank to increase to $470 billion in 2022-2023 as the current account switches to a surplus and PIF increases domestic investments. Still, Fitch pointed to lack of clarity when it comes to investment plans by PIF or Saudi oil giant Aramco and said a shift of public spending outside the budget and a potential increase in debt by state-owned and government-related entities presented “an important risk to the sovereign’s balance sheet strengths”.