Moody’s Upgrades Oman's Outlook to Positive Amid Fiscal Improvements

Oman, 30 August, 2024 : Moody's Ratings has upgraded Oman’s outlook to positive from stable and affirmed its Ba1 long-term issuer and senior unsecured ratings. The ratings agency also confirmed the Government of Oman’s (P)Ba1 senior unsecured medium-term note program rating.

The upgrade reflects Oman's improved fiscal performance, driven by rising oil prices and prudent fiscal management. Moody's highlighted a significant reduction in Oman’s debt, which decreased nearly 27% in nominal terms during 2022-2023 and by an additional 5.6% in the first seven months of 2024. Debt now stands around 34% of GDP as of July 2024.

The Petroleum Reserve Fund’s assets increased to $3.2 billion by mid-August 2024, up from $2.7 billion at the end of 2023. The government also achieved a fiscal surplus of about 1% of GDP in the first half of 2024, while keeping expenditure growth at just 2%, below nominal GDP growth.

Despite these positive indicators, Oman’s ratings are constrained by its heavy reliance on the oil and gas sector, which significantly influences government revenue and GDP. Moody’s expects progress in diversifying away from hydrocarbons to be gradual, limiting the potential for further rating upgrades in the near term.

Source : www.zawya.com