Oman’s outlook revised to positive as fiscal performance improves

Oman’s outlook revised to positive as fiscal performance improves

Muscat: S&P Global Ratings revised its outlook on Oman to positive from stable and fixed the credit rating level at ‘BB+’.

“The positive outlook reflects our view that the government’s balance sheet will strengthen the economic reform programme and lead to faster-than-expected deleveraging in many state-owned enterprises (SOEs), without dampening economic growth outcomes,” S&P said on Friday.

“This would strengthen the economy’s resilience to adverse oil price shocks,” it further added.

According to the international rating agency, this upgrade was due to the continuous improvement in the Sultanate’s public financial performance indicators in addition to government efforts to reduce net public debt.

The outlook revision reflects ongoing improvements in Oman’s government balance sheet, the agency said, adding that “We estimate the government’s budget surplus over 2023 at 2.6 percent of gross domestic product (GDP). Net government debt declined to an estimated 2.4 percent of GDP compared with 7.7 percent in 2022.”

“With forecast budget surpluses averaging 1.2 percent of GDP over 2024-2027, supported by our assumption that the Brent oil price will average $85 per barrel in 2024 before modestly decreasing to $80 per barrel through 2027, the government is well placed to continue reducing external debt or accumulate assets,” S&P said in its report.