Fitch Upgrades Oman’s Outlook to Positive, Confirms BB+ Credit Rating

Oman, 19 December, 2024 : Fitch Ratings revised Oman’s outlook to positive from stable while affirming its credit rating at 'BB+'. The revision reflects reduced government and state-owned entity (SOE) debt, improved fiscal discipline, and growing net sovereign foreign assets.

Fitch projects Oman’s budget surplus at 2% of GDP in 2024, narrowing to 0.7% in 2025 and a minor deficit of 0.2% by 2026, assuming Brent oil prices at $70 per barrel in 2025 and $65 in 2026. Oman’s fiscal breakeven oil price is estimated at $67-70 per barrel.

Non-oil GDP growth is forecasted at 3.7% in 2024, supported by domestic consumption, foreign investment, and tourism. Total GDP growth is expected at 1.8% in 2024, up from 1.2% in 2023.

Government debt is projected to decline to 34% of GDP by end-2024, compared to 68% in 2020. External debt is expected to decrease by $2.8 billion in 2024, strengthening Oman’s sovereign net foreign assets to 10% of GDP, up from -9% in 2020.

Fitch highlighted the potential for a credit rating upgrade if Oman sustains its fiscal prudence, boosts non-oil revenue, and enhances external buffers.