S&P Affirms Oman’s “BBB-” Rating with Stable Outlook

New York : Standard & Poor’s (S&P) has affirmed the Sultanate of Oman’s sovereign credit rating at “BBB-” with a stable outlook, citing the strength of its financial and external positions and the availability of precautionary reserves.

In its latest report, S&P indicated that Oman’s stable outlook is supported by liquid government assets exceeding 40 percent of GDP and foreign exchange reserves approaching 20 percent of GDP, enhancing the country’s ability to withstand external shocks.

The agency noted that Oman has maintained uninterrupted oil and gas exports despite regional geopolitical developments, contributing to improved trade indicators and supporting public finances and the external position.

S&P expects Oman’s real GDP to grow by 1.4 percent in 2026, with growth recovering to an average of 2.3 percent during 2027–2029, driven by non-oil sector activity, higher oil prices and increased production.

The report projected that the state budget will achieve fiscal balance in 2026, with modest surpluses averaging 0.4 percent of GDP in the following years, supported by spending control and growth in non-oil revenues.

Public debt is expected to decline to 31 percent of GDP by 2029, while foreign reserves are forecast to remain between USD 19 billion and USD 21 billion.

S&P also projected continued current account surpluses of around 2.3 percent of GDP in 2026, with inflation remaining moderate at approximately 1.5 percent annually.

The agency highlighted Oman’s ongoing efforts to diversify its economy, particularly in renewable energy, green hydrogen and low-carbon sectors, in line with its goal of achieving carbon neutrality by 2050.

It added that the country’s credit rating could improve over the next two years if fiscal and economic reforms continue and external conditions stabilize.