MUSCAT: S&P Global Ratings has affirmed Oman’s sovereign credit rating at investment-grade ‘BBB-’ with a stable outlook, citing the strength of the sultanate of Oman’s fiscal and external positions and the continued support of solid government buffers.

The Ministry of Finance, citing the ratings agency, said liquid government assets exceed 40 per cent of GDP, while foreign reserves are close to 20 per cent of GDP, helping underpin Oman’s credit profile at a time of heightened regional uncertainty.

S&P expects Oman’s economy to grow by 1.4 per cent in 2026 and by an average of 2.3 per cent during 2027–2029. It also forecast an average budget surplus of 0.4 per cent over 2027–2029, alongside a current account surplus of 2.3 per cent of GDP in 2026 and around 2.0 per cent over the following three years.

The agency projected that Oman’s debt-to-GDP ratio will continue to improve, falling from 33.6 per cent in 2026 to 31 per cent by 2029. Its baseline assumptions include average oil prices of $80 per barrel in 2026 and $65 per barrel in 2027–2029, with inflation seen at a moderate 1.5 per cent in 2026–2028.

Azza al Habsi, Economist at Ominvest, told the Observer that the affirmation should be read as more than a routine technical decision by a ratings agency, describing it instead as a sign that the Omani economy remains capable of maintaining fiscal balance in a highly sensitive regional environment.

She said the timing of the decision added to its significance, as it came amidst rising geopolitical tensions in the region and reflected continued confidence in the state’s fiscal policy, as well as its ability to absorb shocks and manage external risks with discipline.

Al Habsi said preserving investment-grade status under such conditions sends a reassuring signal to markets, investors and lenders that Oman continues to offer a credible and dependable economic base. She added that the next challenge would be to turn this stability into broader, more diversified growth by increasing the contribution of non-oil sectors and reducing exposure to energy market volatility.

S&P said Oman’s rating could be upgraded over the next two years if geopolitical tensions ease and reforms continue to strengthen institutions, support economic diversification and further improve fiscal and external buffers.

The latest affirmation extends Oman’s investment-grade standing first restored in 2025 and is likely to support confidence in the sultanate of Oman’s broader fiscal reform and Oman Vision 2040 economic diversification programme.

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