New Developments at Oman News Agency: Key Insights for Investors and Entrepreneurs in Oman
New York, July 10 – Moody’s has upgraded the credit rating of the Sultanate of Oman from Ba1 to Baa3, with a stable outlook. This improvement is attributed to enhanced public debt indicators, the country’s strong financial position, and effective financial management that has improved its ability to withstand shocks, particularly given a decline in average oil prices and production.
In a report released today, the agency noted that government efforts have yielded positive results, including measures to improve public spending efficiency. Government expenditure has decreased to 29% of GDP, down from an average exceeding 41% during the period from 2016 to 2020. Additionally, the debt level is expected to drop from 37.5% of GDP at the end of 2023 to 35.5% by the end of 2024, with a continued decline anticipated in the coming years. The cost of public debt relative to total revenues is also expected to improve, reaching 7.2% after peaking at around 9% in 2021.
The report indicated that the average breakeven oil price is projected to fall below $70 per barrel in 2024-2025, compared to $84 per barrel from 2016 to 2020.
Oman is expected to record a 1.7% growth in real GDP in 2024, with an inflation rate of 0.7%. The state’s general budget is projected to have a financial surplus of 2.8%, while the current account balance is expected to reach 2.1% of GDP.
The report highlights that Oman’s measures to diversify income sources will further bolster its financial stability, including increasing non-oil revenue contributions to the budget, supporting the development of the green hydrogen sector, and expanding liquefied natural gas production by 2030.
Moody’s emphasized that Oman’s credit rating could improve further as the country continues to enhance its resilience against fluctuations in oil prices, diversify its revenue through accelerated growth in the non-oil sector, and reduce the non-oil primary deficit.
Special Analysis by Omanet | Navigate Oman’s Market
The recent upgrade of Oman’s credit rating by Moody’s to Baa3 signals significant improvements in financial stability, creating a more attractive landscape for investors. Opportunities lie in diversifying revenue streams, particularly in sectors like green hydrogen and natural gas, while businesses should brace for potential risks tied to oil price volatility. Smart investors should focus on leveraging this momentum to capitalize on emerging sectors, ensuring they align with the government’s vision for sustainable growth.
Source: Oman News
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