Oman is poised to reclaim its investment-grade rating due to continued reduction in its debt-to-GDP ratio, enhanced fiscal performance, and a commitment to medium-term reforms, Standard Chartered said in its latest global focus report for Q2 2024.

The current credit rating is “BB+”, revised from “B+” in 2021.

“Oman’s steadfast reforms pave the way for an imminent return to investment-grade rating, fueled by a robust economic trajectory and strong non-oil growth,” said Hussain Al-Yafai, CEO of Standard Chartered Oman.

The bank forecasts a further decline in public debt to 34% of GDP by the end of 2024, supported by sustained twin surpluses. Additionally, external debt repayment is estimated at 5% of GDP in 2024, potentially covered by fiscal surplus proceeds or refinancing options.

Inflation is projected to decelerate from 1% in 2023, with non-oil sector growth, constituting 70% of real GDP, accelerating to 2.5% in 2024, driven by tourism, manufacturing and trade.

Oman’s commitment to reforms is evident in its medium-term outlook, which focuses on structural changes aimed at improving the business environment, attracting foreign direct investment, and executing IPOs, the report said.

Standard Chartered expects a policy rate of 5.5% by the end of 2024, consistent with its latest US Fed forecasts.

(Editing by Brinda Darasha;