Oman’s Credit Rating Upgraded to Investment Grade by Moody’s: What This Means for Investors and Businesses

• By Midhun Raj
• July 11, 2025July 16, 2025
• credit rating economic growth Oman
• With 0 comments

Muscat: In a significant recognition of Oman’s financial stability and growth, Moody’s Investors Service has upgraded the country’s credit rating from “Ba1” to “Baa3,” officially classifying Oman as an investment-grade economy. The agency has also revised its outlook for Oman from “positive” to “stable.”

This upgrade signals Moody’s confidence in Oman’s enhanced macroeconomic and fiscal indicators. The credit rating agency identified several key factors influencing its decision, including improved public debt metrics, a substantial enhancement in the government’s financial position, and the implementation of more effective financial management practices.

The Ministry of Finance highlighted that this upgrade is the outcome of consistent fiscal discipline and structural reforms undertaken in recent years. Notably, during 2024, Oman’s economic indicators showed significant improvements. Public debt decreased from 37.5% of GDP in 2023 to 35.5% in 2024. Efforts to rationalize public spending have also been effective, reducing expenditures from 41% of GDP (2016–2020) to 29% in 2024. Additionally, the average oil break-even price fell from USD 84 per barrel (2016–2020) to USD 70 per barrel for 2024–2025, highlighting increased budgetary efficiency.

Other economic highlights include a decline in public debt servicing costs—from 9% of total revenue in 2021 to 7.2% in 2024—and a real GDP growth of 1.7% at constant prices. Inflation remained low at 0.7%, while the fiscal surplus reached 2.8% of GDP. Furthermore, Oman’s current account balance improved, rising to 2.1% of GDP.

Previously, Moody’s had affirmed a stable outlook for Oman in December 2023 and upgraded it to a positive outlook in August 2024. This recent upgrade to “Baa3” with a stable outlook represents a crucial shift in the international perception of Oman’s economic trajectory.

Looking ahead, Moody’s noted that further improvements to Oman’s credit rating could occur if the country continues to enhance its resilience against oil price volatility. Achieving this would require Oman to diversify its revenue sources, particularly by accelerating growth in the non-oil sector and reducing the non-oil primary deficit.

The Ministry of Finance reiterated its commitment to these objectives, emphasizing that the government will adhere to a disciplined fiscal path to ensure sustainable economic development and bolster investor confidence.

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Oman’s upgrade to a Baa3 credit rating signals a significant shift toward financial stability and enhances the country’s attractiveness to investors. Businesses should capitalize on this favorable perception by exploring new ventures in diversified sectors as Oman’s commitment to sustainable economic practices promises growth opportunities. However, the need to reduce reliance on oil revenue remains critical, urging entrepreneurs to innovate in the non-oil space while maintaining fiscal discipline to mitigate future risks.