Riyadh: Saudi Arabia looks set to reverse most of the 2020 increase in its debt burden over the next several years while also rebuilding its fiscal buffers, a report released by global rating agency Moody’s said. The firm’s predictions were based on their assessment of the Kingdom"s improving track record of fiscal policy effectiveness, together with the strength of institutions and governance in the country. This is reflected by the robust effectiveness of the Kingdom’s monetary and macroeconomic policies. Saudi public debt issuance increased by nearly 50 percent in 2020 to SR163 billion ($43.4 billion) according to the Capital Market Authority. Saudi Arabia"s policy responses to both periods of low and high oil prices, the report said, demonstrates a commitment to fiscal consolidation and longer-term fiscal sustainability. The report referenced the growth in the Saudi economy by 10.2 percent in the first nine months of 2022, driven by the recovery of oil production and accelerated growth in the non-oil sector. The global rating agency showed that the Kingdom’s march towards economic diversification is on track, with the report emphasizing the strong growth in Saudi Arabia’s non-oil sector during 2021 and 2022 — at an average of 5 percent annually until the second quarter of 2022. The report said that the growth would likely be sustained with a number of the Kingdom’s giga projects moving from design into construction phase. In a report released in October, Moody’s said the Kingdom"s decision to increase its planned spending by 18 percent will reduce windfall savings from oil, but the move could help the Kingdom accelerate its economic diversification On Sept. 30, the Saudi government announced that it plans to revise its spending upward to around SR175 billion in 2022-24, compared to the targets previously published at the end of 2021. The increase amounted to around 4-4.5 percent of the Kingdom’s GDP. Speaking earlier this month after Saudi Arabia approved the state budget for the coming fiscal year, which forecasts a surplus of SR16 billion and gross domestic product growth of 3.1 percent, the governor of the Saudi Central Bank said the country’s monetary conditions are in good shape. “Despite the exceptional circumstances in the Kingdom and the world, the Saudi economy … has proven a high ability to withstand shocks. Monetary conditions in the Kingdom are reassuring as a result of the central bank’s prudent monetary policy,” Fahad Almubarak said. Almubarak commended the banking sector for “its financial solvency, operational efficiency, good liquidity, and ability to face current challenges.”