Oman’s public debt drops to 35% of GDP in 2023

Oman’s public debt drops to 35% of GDP in 2023

Muscat – Helped by fiscal reforms and elevated oil prices, Oman’s public debt has substantially decreased to 35% of gross domestic product (GDP) in 2023 from nearly 70% of GDP in 2020 when the dual-shock of the pandemic and oil price collapse severely impacted the government finances.

The sultanate’s debt-to-GDP ratio also declined significantly in 2023 compared to 2022 when it stood at 40%, attributed to the government’s spending restraints and higher than budgeted oil prices. This improved debt situation has also contributed to an enhancement in Oman’s sovereign credit ratings.

Due to the fall in oil prices since 2014, Oman’s general budgets recorded deficits for more than eight years, forcing the country to finance these deficits by borrowing from local and external institutions. Consequently, public debt increased to nearly 70% of GDP in 2020.

In August last year, the Ministry of Finance estimated that Oman’s safe debt limit is at 30% of GDP, allowing the government to meet debt obligations and sustain economic growth.

As part of the government’s initiatives for Liability Management Exercise and Public Debt Reduction, the preliminary results of the 2023 budget showcase significant achievements.

The government successfully reduced public debt from RO17.6bn in 2022 to RO15.2bn at the end of