Fitch Ratings has revised Oman’s rating to “Positive” from “Stable” with the rating affirmed at “BB”.
The agency said in a report seen by Economy Middle East that these positive outlooks reflect a decline in government debt to GDP, with higher oil prices and spending consolidation reducing external liquidity risks.
“The forecast also includes our expectation that the government remains committed to fiscal consolidation. Fiscal reform should be sufficient to curb the deterioration of Oman’s budget, debt-to-GDP ratio, and external situation as we assume lower oil prices this year and next.”
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Government debt to GDP fell to 40 percent in 2022, from 61 percent at the end of 2021, and “we expect it to reach 37 percent by the end of 2024, from 48 percent in our last review in August 2022.”
Fitch expects an Omani budget surplus of 2.3 percent of GDP in 2023, compared to 4.9 percent in 2022, Oman’s first surplus since 2013.
The IEA assumes that the average price of Brent oil will fall to $85 per barrel in 2023, while production will be constrained by OPEC+ production agreed in April 2023, resulting in a 9 percent decline in total revenue.
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