Subscriptions to the 82nd issue of Government Development Bonds opened last Tuesday, with a value of RO 75 million (USD 193.5 million) and an option to increase the issuance by an additional RO 25 million ($64.5 million). This is the third issuance of its kind this year, and the Sultanate of Oman plans to introduce further development bond issues during the remaining months of the current year.

As is well known, investing in government development bonds is considered a conservative investment option suitable for a certain category of investors with strong financial capacity, as well as for those seeking to diversify their investment portfolios.

Sources interested in these issuances believe that investing in government bonds is a good and relatively low-risk investment compared to many local alternatives, especially for investors seeking security and fixed income, as the return on this issuance reaches 4.25% annually

Government bonds are among the least risky investment instruments locally, since they are backed by the state, compared to other assets individuals may hold in their portfolios such as real estate, stocks, and business ventures.

The objective of these issuances is to continue supporting the country’s financial sustainability plans and efforts, while diversifying sources of funding for the annual state budget, in addition to reducing reliance on external borrowing, lowering the public debt servicing ratio, and strengthening and expanding the Omani capital market through attractive opportunities for both local and international investors. The maturity period of this issuance is 7 years.

The current timing for subscription to government bonds is appropriate for two main reasons: the improvement in Oman’s credit rating, and the decline in the public debt ratio compared to previous years, which enhances investors’ confidence in government bonds.

According to the 2026 State General Budget statement, net domestic borrowing during the current year is expected to reach RO 130 million Omani rials ($335.4 million) after completing new issuances and repaying bonds due this year.

The total financing needs of Oman’s general budget for 2026 amount to approximately RO 2.3 billion ($5.934 billion), including about RO 1.7 billion ($4.386 billion) allocated to repay maturing debt (both domestic and external), in addition to financing the estimated budget deficit for the current fiscal year.

Bond issuances perform several natural economic functions in public finance management, including financing development projects and capital expenditures for infrastructure and long-term development plans such as roads, energy, and public services. They also help diversify government funding sources instead of relying entirely on oil revenues or external borrowing, as the government uses domestic debt instruments to reduce financial risks.

Furthermore, bonds provide a safe investment tool within the local economy, especially for banks, pension funds, insurance companies, and major investors, while supporting the local financial market, improving market liquidity, and strengthening the Muscat Stock Exchange.

Bond issuances also help absorb excess liquidity or redistribute it in an organized manner.

The government’s bond investment policy has helped reduce the debt-to-GDP ratio over recent years to about 34% currently, compared to approximately 68% in 2020. This ratio is expected to decline further to 33% by 2028, which represents a significant improvement in the Omani economy.

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