S&P Affirms Oman’s Ratings at BBB-: Implications for Investment Confidence and Business Growth
Standard & Poor’s Affirms Oman’s Credit Rating with Stable Outlook
Standard & Poor’s (S&P) has affirmed the Sultanate of Oman’s credit rating at "BBB-" with a stable outlook, reflecting ongoing efforts in fiscal consolidation and economic diversification by the government.
The agency anticipates an increase in the average oil price, projecting it to rise to $60 per barrel، و $65 per barrel in the second half of 2025. Consequently, Gross Domestic Product (GDP) growth at constant prices is expected to be 1.7% in 2024, with projections exceeding 2% from 2025 to 2028.
Oman’s public debt is forecasted to decrease from 36% of GDP in 2024 to 33% by 2028. The non-oil sector is expected to experience steady growth of approximately 2.9% annually, driven by investments in manufacturing and tourism.
Net government assets are projected to remain stable at around 8% of GDP throughout the period from 2025 to 2028, while inflation is expected to be low and stable, averaging 1.5% per year during the same timeframe.
Fiscal and economic reforms are anticipated to keep their momentum through 2025-2028. A minor fiscal deficit of 0.5% of GDP is expected in 2025, with a balanced fiscal situation anticipated from 2026 to 2028.
S&P indicated that a potential upgrade in Oman’s credit rating is possible, contingent on the government’s continued efforts to improve economic sustainability, strengthen public finances, and enhance local capital markets.
However, the recent CBO Financial Stability report highlighted Oman’s ongoing reliance on hydrocarbon revenues despite significant progress in diversification efforts. A prolonged decline in oil prices could negatively impact fiscal and external balances, posing risks to macroeconomic and financial stability.
The global financial environment remains fragile due to persistent geopolitical tensions in the Middle East and Europe, coupled with uncertainties in trade policy. Additionally, global growth projections have been slightly revised downward, reflecting weaker-than-expected performance in advanced economies and a slowdown in global trade momentum.
تحليل خاص من عمانت | تصفح سوق عُمان
The affirmation of Oman’s credit rating by Standard & Poor’s signals stability amid ongoing economic reforms, offering a more favorable environment for businesses and investors. Opportunities lie in sectors such as manufacturing and tourism, as these areas are projected to experience steady growth, while the risk remains in the country’s reliance on oil revenues, requiring vigilance against potential market volatilities. Strategic investors should consider diversifying portfolios and positioning themselves in non-oil sectors to leverage the government’s continued push for sustainable economic growth.
