S&P Revises Oman’s Outlook to Positive, Affirms Rating at “BB”

muscat
muscat

Muscat: S&P Global Ratings revised Oman’s outlook to positive and affirmed its ratings at “BB”, in light of improving fiscal performance.

The agency said in its credit rating report on the Sultanate of Oman issued today, that the revised outlook came as a result of the reform measures undertaken by the government of the Sultanate of Oman in the financial and economic areas that may contribute to strengthening Oman’s fiscal position in a better way than the agency expects, adding a greater degree of resilience of the national economy against oil price shocks.

The agency pointed out that the government’s efforts to improve fiscal performance and policies supporting economic growth were reflected significantly in reducing public debt. It also highlighted the strong growth witnessed by the nominal GDP and the decline in total debt to GDP from more than 60 percent in 2021 to about 40 percent in 2022.

The agency added that the Sultanate of Oman is determined to continue improving its fiscal position, which will enhance its resilience against oil prices volatility.

The agency expects that the public debt will decrease to about RO 16.5 billion, or 37 percent of GDP, by the end of 2023. It pointed out that the decline in the public debt and posting financial surplus during the years 2023 and 2024 will lead to an increase in the fiscal space of the Sultanate of Oman.

In its report, the agency said that the government managed to rationalise public spending during 2022, despite the increase in oil revenues, as a result of the government’s continued efforts to control public expenditure.

The agency also expects the growth of GDP (at constant prices) at an average rate of about 2.5 percent during the period 2023-2026. It also expects that the average growth of non-oil sector will reach about 3.5 percent during the period 2025-2026.

In the report, the agency pointed out that the average price of Brent crude is expected to reach $90 per barrel in 2023, $80 per barrel in 2024, and $55 per barrel in 2025.

The report stated that the credit ratings of the Sultanate of Oman could be raised during the coming period if the ongoing reform measures further strengthen Oman’s fiscal position, in light of the continued reduction in government net debt and interest costs.

At the end of its report, the agency noted that the credit rating may be affected if fiscal reform implementation slows, or the occurrence of unexpected factors leading to larger fiscal deficits or a worse external position in a way that exceeds the agency’s expectations.

It is worth noting that the government of the Sultanate of Oman has managed to reduce the public debt to RO 16.6 billion during the first quarter of 2023. – ONA

more recommended stories

Terms of Use:

  • This website Arabian Daily is an individual’s property, not used for any commercial or sales purposes. What you see here are one’s random thoughts in action. I, by no means, endorse any product or party through this, unless stated explicitly.
  • All work you will find here is copyrighted unless stated otherwise. No part of this work can be reproduced in any way with the exception of a) if you share our work, it should link back to this website; b) if you quote any part of our work, it should be properly credited to us with a link to this website.
  • All images used on this website have been taken from open source image websites on the Internet. If any of them are copyrighted to you and you want us to take them down or add credits, please feel free to contact us here, or by using the contact form on this page.
  • The views expressed on Arabian Daily are solely ours. They do not represent any party or any particular school of thought. This website does not promote racism in any form.
  • Privacy Policy:
    This website will respect the readers’ and the writer’s privacy. We do not sell any of their personal or contact information to another company. We do not put your information on spam lists. Also, and more importantly, we are not responsible for the privacy practices of any of our advertisers or website commenters.
  • Reserve Rights: We reserve the right to change the focus on this website, to shut it down, sell it or to change the terms of use at our own discretion.