S&P upgrades Oman outlook to ‘positive’ on bright fiscal future

S&P upgrades Oman outlook to ‘positive’ on bright fiscal future

S&P Global Ratings has revised its outlook on Oman to 'positive' from 'stable' and affirmed its 'BB+/B' long- and short-term foreign and local currency sovereign credit ratings on the sultanate.Muscat – S&P Global Ratings has revised its outlook on Oman to ‘positive’ from ‘stable’. At the same time, the rating agency affirmed its ‘BB+/B’ long- and short-term foreign and local currency sovereign credit ratings on the sultanate.

The positive outlook reflects S&P’s confidence that the Omani government’s balance sheet will strengthen and the economic reform programme could lead to faster-than-expected deleveraging in many state-owned enterprises, without dampening economic growth outcomes. This would strengthen the economy’s resilience to adverse oil price shocks.

In a statement released on Friday, S&P said it could raise Oman’s sovereign ratings over the next 18 months if the sultanate’s fiscal position strengthens further – for instance, from a continued reduction in government debt – and the state-owned enterprise sector continues deleveraging. A stronger economic growth trajectory could also contribute to an upgrade, it added.

‘The outlook revision reflects ongoing improvements in Oman’s government balance sheet. We estimate the government’s budget surplus over 2023 at 2.6% of GDP. Net government debt declined to an estimated 2.4% of GDP in 2023