Skip to content Skip to Search
Skip navigation

S&P upgrades Oman’s credit rating on lower debt risk

Unsplash.com
Major government reforms, such as the reorganisation of government-related entities, are starting to yield results, said S&P

S&P Global Ratings has upgraded Oman’s credit ratings on the back of a continued positive outlook for the oil sector and fiscal and economic reforms momentum over 2023-2026.

The ratings agency raised its long-term foreign and local currency sovereign credit ratings on Oman to “BB+” from “BB”. It also affirmed the sultanate’s short-term ratings at ‘B’, with a stable outlook.

“The upgrade reflects the improved resilience of the Omani economy to external shocks on the back of continued supportive oil sector prospects along with sovereign balance sheet deleveraging and broader structural reforms,” S&P said in a report.

High oil prices will continue to support Oman’s fiscal surpluses and the government’s efforts to reduce debt, it added.

Major government reforms, such as the reorganisation of government-related entities, are starting to yield results, improving operational efficiency and strengthening the financial profiles of these individual companies.

S&P expects the GDP growth to average two percent over 2023-2026 after a year of slowdown due to voluntary crude output cuts.

Brent oil prices will average $83 per barrel in 2023 and $85 in 2024 and beyond.

“This will support the government’s efforts to use ongoing fiscal surpluses for debt repayment. We estimate that government debt will decrease to 38 percent of GDP in 2023, down from close to 40 percent in 2022,” the ratings agency said.

Increased revenue on higher oil prices helped Oman post a budget surplus of OMR1.144 billion ($2.97 billion) last year. The government repaid OMR1.1 billion in loans in the first quarter of this year.

High oil prices have helped Oman post a budget surplus of OMR1.14 billion ($2.97 billion) in 2022, with OMR1.1 billion in loans repaid in the first quarter of this year.

Oman’s GDP fell 9.5 percent in the second quarter of 2023, primarily due to a slowdown in oil-related activities.

The sultanate’s GDP was OMR10.1 billion ($26.24 billion) in the second quarter, compared with OMR11.1 billion for the same period last year, according to the National Center for Statistics and Information.

Earlier this week, Fitch Ratings upgraded Oman’s credit rating to BB+ from BB with a stable outlook as lower external debt has reduced liquidity risks.

Latest articles

Adnoc sought advice from investment banks on buying a significant stake in BP, a media report said

UAE’s Adnoc explored acquiring BP

Abu Dhabi National Oil Company (Adnoc) explored the possibility of acquiring British oil major BP but abandoned the plan as it did not fit into its strategic growth objectives, a media report said.  The talks did not advance beyond the initial stages, Reuters reported, citing informed sources.  The UAE state oil company also sought advice […]

Nature, Undersea cables account for as much as 90 percent of Europe-Asia telecommunications, Water

Iraq and Kuwait team up for European telecom corridor

Iraq’s Informatics and Telecommunication Public Company, a division of the Ministry of Communications, has signed an agreement with Kuwait’s Zajil Telecom to create a telecommunications corridor from the Gulf region to Europe, transiting through Iraq and Turkey. The new route will pass through Iraqi sea and land ports. Iraq’s minister of communications Hayam Al-Yasiri said […]

An artist's impression of part of the Diriyah Square development

Diriyah Square planned for historic Riyadh district

A public space featuring 400 retail outlets and 100 restaurants and cafes is planned for the historic Riyadh district of Diriyah. Diriyah Square will be announced next week at the World Retail Congress in Paris and aims to attract a combination of international retail brands and local artisans.  Diriyah Gate Development Authority group CEO Jerry […]

Turkish crude steel output rose 25% year on year to 3.2 million tonnes in January

Turkish steel in the black but EU rules rankle

Turkey’s steel industry has rebounded strongly from a weak 2023, despite facing new emissions standards and competition for important markets.  Crude steel output rose 25 percent year on year to 3.2 million tonnes in January, with domestic consumption of finished steel reaching 3.5 million tonnes, a 20 percent increase.  Exports were also up, increasing 23 […]