Fitch affirms Oman's credit rating at BB+, with stable outlook

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Muscat: Fitch issued its credit rating report on the Sultanate of Oman, in which it affirmed the credit rating at “BB+” with a stable outlook. This was due to the decline in public debt as a percentage of GDP and the positive impact of the measures on public finances.

Fitch expects the Sultanate of Oman to achieve a fiscal surplus of 2.2 per cent of GDP in 2024 and 0.9 per cent in 2025, assuming that the average oil price reaches about US$80 per barrel in 2024 and about US$70 per barrel in 2025. The agency expects the oil price break-even point in the Sultanate of Oman to reach 65-70 US dollars per barrel.

The agency said that it expects public debt as a percentage of GDP to decrease from 36.5 per cent at the end of 2023 to 32.4 per cent in 2024, and 31.9 per cent in 2025, indicating that the Sultanate of Oman will continue to repay some debts before their due date, benefiting from additional revenues resulting from high oil prices. The agency expects the government to repay about US$2.9 billion of its foreign debt in the first half of 2024.

The agency indicated that it expects GDP to grow from 1.3 per cent. f the non-oil sector by 2.7 per in 2023 to 1.8 per cent in 2024. This growth is attributed to increased domestic consumption, foreign investment growth, and tourism sector improvement. The agency expects the non-oil sector to grow to 2.8 per cent in 2025.

Fitch explained in its report that the Sultanate of Oman's credit rating may rise if financial control measures continue, public debt declines as a percentage of gross domestic product, and non-oil revenues grow.