Moody's upgrades Oman's credit rating to “Ba1” with stable outlook

Moody's has raised Oman's credit rating for the second time this year from “Ba2” to “Ba1” and changed its future outlook from positive to stable.

The credit ratings agency cited a continued decline in public debt, controlled spending and improved financial revenues.

Moody's said Oman's determination to reduce debt will strengthen the Sultanate's financial position and enable it to confront future shocks even if oil prices fall.

Financial diversification since 2020 has continued a trend of reduced dependence on oil revenues, it said. The agency predicted average oil prices will reach 80-85 US dollars per barrel during 2024-2025 before declining to 55-75 US dollars per barrel in the medium term.

As a result, the agency expects Oman's public debt to fall to about 35 per cent of GDP over the next three years.

Moody's said Oman will achieve a current account surplus of about 2 per cent in 2023, down from 5 per cent in 2022. It predicted a general budget surplus of about 3.5 per cent of GDP, down from 7.5 per cent during 2022.

The agency said Oman's green hydrogen projects are likely to lead to reduced credit risks. Global Bank also suggested the credit rating may rise if public debt continues to fall and non-oil revenues increase.

This is an unofficial English version of an Arabic report. To view the official Arabic text, click here.