Moody’s changes Oman’s outlook to “positive”

Moody’s revises Oman’s outlook to positive and affirms Ba1 ratings.

Muscat: Moody’s attributed this improvement to the ongoing improvement in the public debt and oil revenues, the government’s commitment to the public debt management strategy, which led to reducing external debt risks, an increase in fiscal strength and robust foreign-currency buffers.

Moody’s agency indicated that the measures taken by the government of the Sultanate of Oman have enhanced its ability to confront shocks, such as: fluctuations in energy prices, rising interest rates and other variables.

The agency said that the Sultanate of Oman was able to reduce public debt to about 36.5 percent of GDP by the end of 2023, with external debt amounting to about 24 percent compared to what it was in 2020, which amounted to more than 50 percent of GDP. The agency’s report indicated a decrease in the rate of total public debt until the end of last July to about 34 percent of GDP.

The agency explained that there are a number of financial, economic and monetary risks surrounding the credit rating, including the volatility of global oil and gas prices affected by the prospects of global economic growth that could affect the ability of the Sultanate of Oman to improve its indicators.

On the other hand, the agency confirmed that the improvement in the credit rating may come through the continuation of government measures in managing financial obligations and reducing public debt levels, enhancing non-oil revenues and moving towards clean energy revenues, and increasing the government’s ability to address financial fluctuations by strengthening the state’s financial position and foreign exchange reserves and improving economic and social indicators.