Moody's predicts improvement in Oman's budget deficit

Muscat: Credit rating agency Moody’s evaluated the Sultanate’s creditworthiness and it expects the Sultanate’s budget deficit to improve to -3.6 per cent in 2021 after it exceeded -18 per cent in 2020.

The Ministry of Finance said: “Moody’s agency affirms the credit rating of the Sultanate at Ba3 and the outlook is a result of the challenges resulting from the spread of the COVID-19 pandemic and fluctuations in oil prices and their effects on the local economy." The following can be expected according to the agency:

Real GDP growth from -2.6 per cent in 2020 to 2.6 per cent in 2021 and 3.5 per cent in 2022.

The budget deficit improvement from -18.1 per cent in 2020 to -3.6 per cent in 2021.

The public debt-to-GDP ratio could decrease by about 10 per cent compared to what was recorded in 2020.

The current account deficit may decrease from -13.4 per cent of GDP in 2020 to -2.3 per cent in 2021.

"The Sultanate affirms its relentless endeavour to address the current situation, achieve financial sustainability and improve the prospects for the local economy through the application of financial and economic plans and procedures," the ministry added.