S&P Affirms Oman’s Investment Grade Credit Rating at ‘BBB-‘ with Stable Outlook

rating at investment grade ‘BBB-‘ with a stable outlook, citing improvements in public finance performance and continued efforts to reduce public debt.

Key Highlights:

• Fiscal resilience: S&P noted Oman’s consistent efforts to strengthen its fiscal position, reduce public debt, and improve governance of state-owned enterprises.
• Economic recovery: Real GDP growth is expected to average around 2% annually between 2025 and 2028, up from 1.2%–1.3% in 2023–2024.
• Budget surplus: The fiscal surplus is projected to average just under 1.5% of GDP during 2025–2028, compared to 2.2% in 2024.
• Oil price assumption: S&P’s forecasts assume an average Brent crude oil price of $70 per barrel over the next two years (vs. $81 in 2024).
• Public debt: Oman has successfully reduced its debt-to-GDP ratio from 68% in 2020 to 36% in 2024, with projections to reach 30% by 2028.
• Inflation: Expected to remain moderate at 1.5% annually between 2025 and 2028.
• External position: The current account surplus is estimated to average 1.3% of GDP over the next four years.
• Liquidity: High-liquidity assets are forecast to remain close to 40% of GDP.

Positive Outlook

S&P acknowledged Oman’s efficient fiscal management and praised its transparency and control over capital and operational expenditures. The agency also commended the Sultanate’s progress in hydrogen development, aligning with its carbon neutrality goals by 2050.

The rating could improve further if Oman increases non-oil revenues, enhances spending efficiency, and continues to implement reforms supporting economic diversification and capital market development.