Global credit rating agency Moody’s Ratings announced that it has upgraded its outlook for the Government of Oman from ‘stable’ to ‘positive,’ while reaffirming the sultanate’s Ba1 long-term issuer and senior unsecured ratings.
The agency also retained its (P)Ba1 rating for the Government of Oman’s senior unsecured medium-term note program.
Moody’s attributed the positive outlook change primarily to the ongoing enhancement of the government’s debt metrics, bolstered by high oil prices and prudent fiscal management. This development increases the possibility that Oman’s fiscal strength could be maintained at a level indicative of a higher rating.
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The report highlighted that Oman has successfully reduced its government debt over the past two years without diminishing its financial assets. This declining debt burden, particularly in foreign currency, strengthens the Omani government’s capacity to weather shocks, such as fluctuations in global energy markets or rising global interest rates.
The affirmation of Oman’s Ba1 ratings is further supported by the nation’s high per-capita income. Additionally, the government maintains manageable debt levels. There is also an improving record of effective fiscal policy.
Moody’s also indicated that continued enhancements in Oman’s debt metrics throughout 2023 could pave the way for a higher rating.
The rating agency noted that any potential improvement in Oman’s rating will depend on evidence of the country’s growing resilience. This includes the ability to handle possible declines in global oil demand and prices. In addition, it must address longer-term credit challenges related to the global transition to carbon neutrality.
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