Standard & Poor’s upgrades Oman’s credit rating to “BB” with a stable outlook

The agency indicated in its credit rating report for the Sultanate of Oman that the credit rating upgrade came as a result of the remarkable improvement in the state’s financial performance, the improvement in the performance of the balance of payments, within the framework of the government’s medium-term financial plan, and the rise in oil prices.

The agency expected that the country’s financial performance would witness further improvement during the current year, in addition to an improvement in the net assets position in the coming year.

In its report, the agency stated that the government of the Sultanate of Oman has made great efforts to reduce the public indebtedness of the state, benefiting from additional financial revenues, and expects a decline in the rate of public debt of the state as a percentage of GDP from 61 percent in 2021 to 44 percent in 2022.

The agency expects Oman’s revenues to rise during the next two years, and the state’s general budget and current account to continue to achieve financial surpluses until 2024, which will lead to strengthening the levels of the state’s financial reserves, and achieving a financial surplus of about 5.8 percent of GDP during this year.

It also expects the current account to achieve a fiscal surplus of about 5.2 percent of GDP, compared to a deficit of about 4.9 percent and 16.2 percent, during the years 2021 and 2020, respectively.

The agency stated that the growth of economic activity in the Sultanate of Oman will be supported by the rise in hydrocarbon production, the improvement in investment rates, and the government’s provision of more supportive measures directed at society and the private sector, and it is expected that the GDP growth rate will reach approximately 4 percent in 2022, and 3 percent for the next year. Next 2023.

On the other hand, the agency indicated that the non-oil activities sector will become the main driver of growth in the coming years, expecting this sector to grow from 1.8 percent in 2022 to an average rate of about 2.5 percent during the period 2024-2025.

The agency stated that the rating rate of the Sultanate of Oman may continue to rise in the event that financial measures continue to strengthen the financial position of the state.

It is noteworthy that “Standard & Poor’s” raised the credit rating of the Sultanate of Oman twice during the current year, from “B+” rating in October of last year 2021 to “BB-” last April, and now it raised it again to become “BB” for this year 2022.