S&P Confirms Oman’s Investment Grade Credit Rating: Implications for Investors and Business Growth
Standard & Poor’s Affirms Oman’s Credit Rating at “BBB-” with a Stable Outlook
Standard & Poor’s (S&P) has confirmed the Sultanate of Oman’s credit rating at the investment grade level of “BBB-“, maintaining a stable outlook. This decision reflects the resilience of Oman’s financial stability and external positions, along with the availability of precautionary reserves that support creditworthiness amid regional geopolitical challenges.
In its recently published credit rating report, S&P noted that Oman’s liquid government assets exceed 40% of GDP, complemented by foreign exchange reserves nearing 20% of GDP. These factors bolster Oman’s capacity to withstand economic shocks and uphold stability in public finances, particularly given its strategic geographical location, which has allowed uninterrupted oil and gas exports despite regional tensions.
The report also highlighted the positive impact of regional developments on Oman’s trade exchange indicators, which further enhances public finances and external stability. S&P forecasts real GDP growth at approximately 1.4% in 2026, with expectations of recovery to an average of 2.3% from 2027 to 2029. This outlook is attributed to sustained activity within non-oil sectors, anticipated increases in oil prices, and rising oil production in the medium term, with Brent crude expected to average US$80 per barrel in 2026, declining to US$65 per barrel from 2027 to 2029.
Furthermore, the agency predicts that the government will achieve fiscal balance in the 2026 state budget, a revision from earlier projections indicating a slight deficit. It anticipates relatively stable fiscal surpluses of about 0.4% of GDP from 2027 to 2029, driven by controlled public spending, growth in non-oil revenues, and moderate increases in oil and gas production.
S&P expects public debt to decrease to 31% of GDP by 2029, down from around 35% in 2025. Liquid assets are projected to remain robust, averaging 40% of GDP in the coming years, with foreign reserves expected to stay between US$19 billion and US$21 billion until 2029.
The current account is also anticipated to remain in surplus, with 2.3% of GDP projected for 2026 and an average of 2% during 2027-2029, benefiting from strong export flows and improved trade indicators. Inflation is expected to remain moderate, averaging around 1.5% annually from 2025 to 2028.
S&P credited Oman’s effective management of public finances—including control over current and capital expenditures, subsidy rationalization, and efforts to enhance non-oil revenues—with mitigating the current economic challenges.
Looking ahead, the agency foresees ongoing diversification of Oman’s economy, particularly in renewable energy, green hydrogen, and low-carbon ammonia sectors, aligning with the country’s goal to achieve carbon neutrality by 2050. This transition positions Oman as a promising regional hub for clean energy and supports sustainable growth in the medium and long term.
S&P indicated that Oman’s credit rating could improve over the next two years if geopolitical tensions ease, and if ongoing measures to strengthen institutions, support economic diversification, enhance non-oil revenues, and improve public spending efficiency continue to progress.
The Government of the Sultanate of Oman remains committed to effectively managing public finances and public debt as planned, including the implementation of its approved borrowing strategy for 2026, while ensuring the fulfillment of all financial obligations.
Special Analysis by Omanet | Navigate Oman’s Market
The affirmation of Oman’s “BBB-” credit rating signals a stable economic environment, offering businesses a chance to capitalize on increased non-oil sector activity and enhanced trade exchanges. However, investors must remain vigilant about regional geopolitical risks while exploring opportunities in the renewable energy sector, which positions Oman as a promising hub for sustainable growth. Strategic investment in non-oil revenues and diversification measures is crucial for long-term success in this evolving landscape.
