Oman’s rating upgrades due to cut in public debt

Oman Saturday 13/April/2024 20:02 PM
Oman’s rating upgrades due to cut in public debt

Muscat: A number of experts and specialists concerned with economic matters reaffirmed the continued improvement and noticeable development in the Sultanate’s credit rating made by various international credit rating agencies.

The improvement in the credit rating is mainly due to the government efforts and action taken to control public spending, reduction of the public debt, increase in non-oil revenues and improvement of the several performance indicators of the State General Budget.

Mohammed bin Abu Bakr Al Ghassani, Chairman of the Board of Oman Development Bank said that the improvement in the Sultanate’s credit rating by the international rating agencies like Standard & Poors (S&P) in March 2024 saw its long-term foreign and local currency sovereign credit ratings on Oman upgraded to ‘BB+’ from ‘BB’.

“This improvement was on the back of the government’s efforts aimed to control the spending and to increase the revenues of the State, to reduce the public debt coupled with the efficiency of the financial and economic policies which came within the financial sustainability programme,” he said. He added that the improvement in the credit rating is a significant indicator for the investor’s confidence in the economy and the banking sector, which would result in the Sultanate’s possibility of taking loans in the future, if required, at lower costs and would encourage foreign investors to enter into various investments and huge capitals.

All these would help accelerate the pace of the strategy of economic diversification and the targets of Oman Vision 2040.
Dr. Yousef bin Hamad Al Balushi, an economic expert, said that there are remarkable benefits for the improvement of the Sultanate’s credit rating, mainly in the field of obtaining finance at reasonable cost for the government from commercial banks.

He said that the local and foreign investors view this credit rating as a key indicator for making their investment decisions. The improvement in the credit rating of the Sultanate would provide an opportunity for development of the Sultanate’s economy and for seeking greater finance for various development projects.

Dr. Khalid bin Said Al Ameri, Chairman of Omani Economic Association, said that the Sultanate has made many developments which had a positive impact on improvement of the credit reliability of the national economy.

Al Ameri further said that there has been a substantial improvement in the size of Oman’s public debt which decreased by 13.63 percent to OMR15.2 million at the end of 2023 from approximately OMR17.6 billion at the end of 2022. “This is an important achievement that was reflected in the improvement of the creditworthiness of the Sultanate of Oman,” he added.

Standard and Poor's upgraded the Sultanate’s future outlook from stable to positive and fixed the Sultanate’s rating at BB+, which is a clear evidence of the success of the financial and economic policies taken in conjunction with the national priorities and the objectives of the 10th Five Year Development Plan, he further added.