Skip to content Skip to Search
Skip navigation

Fitch raises Oman’s credit rating on lower external debt

By Pramod Kumar
A dhow sailing in Musandam, Oman. S&P says its ratings could be raised over the next 18 months if Oman’s fiscal position strengthens Unsplash.com
A dhow sailing in Musandam, Oman. S&P says its ratings could be raised over the next 18 months if Oman’s fiscal position strengthens

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

The upgrade reflects the use of high oil revenues to pay down debt and spread its maturity, spending restraint reducing external risks, and an increase in oil price forecast, the ratings agency said in a statement.

“We project general government debt to fall to 36 percent of GDP in 2023 and stabilise at around 35 percent in 2024 and 2025, below the ‘BB’ peer median of 54 percent,” Fitch said.

The revision compares with its forecast of 45 percent of GDP in 2023 in August 2022.

The rating agency expects the government to continue recent fiscal consolidation measures. Reducing the fiscal breakeven price to below $70 per barrel over the forecast horizon, from $80-90 over 2017-19, also significantly reduces vulnerability to oil price swings, although risks remain.

“We project Oman Investment Authority’s net foreign assets to return to a positive position in 2023, after falling to -9 percent of GDP in 2020, from 53 percent in 2014.”

Forex reserves will rise only modestly this year as debt repayments continue, to cover 3.3 months of current account payments, below the ‘BB’ median of 4.3 months.

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 recorded a fall of 9.5 percent in the second quarter of 2023, largely 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.

Latest articles

Modern buildings in the city center of Riyadh, Saudi Arabia

Riyadh leads Saudi Arabia’s hot property market

Strong population and employment growth in Riyadh is driving a surge in real estate transactions as new properties cannot come on the market fast enough. A dramatic rise in the number of deals in the 12 months to the end of June was also visible in Jeddah and Dammam, according to a report this week […]

Adnoc LNG

Adnoc drops plan to upgrade UAE’s only LNG facility

An upgrade of the Das Island liquefied natural gas plant has been cancelled by Adnoc Gas, as it shifts priorities towards greenfield developments. “We have a funnel of exciting opportunities in which we can invest while at the same time exercising capital discipline,” Adnoc Gas said. Das Island’s liquefaction and export terminal, the only LNG […]

The new technology can help with tracking projects as contractors often have no idea how many workers are on site at one time and workers are frequently unsupervised

Saudi startup’s smart helmets upping safety on building sites

When Hassan AlBalawi first proposed a smart helmet that would track all employee movements on building sites, construction companies could not see the point.  “We were focusing on this problem of how to get technology into the construction field, measuring the drowsiness of construction workers. But it turned out the construction companies didn’t know or care,” […]

Aircraft, Airliner, Airplane

Kuwait Airways 2023 revenue soars 16% to $1bn

Increased passenger volume and flight operations increased revenues at Kuwait Airways by 16 percent in 2023. The topline reached KD335 million ($1.1 billion) last year, as the number of flights soared 26 percent year on year to 32,839, the state-run Kuwait News Agency reported, citing chairman Abdulmohsen Alfagaan. No details were shared on profit or […]