Standard & Poor's confirms Oman's investment grade credit rating

Standard & Poor’s has affirmed the investment-grade credit rating of the Sultanate of Oman at BBB- with a stable outlook.

The S&P Agency attributes this to the continued improvement in public finance performance and a strengthening of the country’s financial resilience, reflecting the Government’s ongoing efforts to reduce public debt and improve the governance of state-owned enterprises.

In its report, S&P notes that Oman has made significant progress in recent years in addressing structural challenges, including large deficits in the state budget and the balance of payments.

The Agency expects real GDP growth to improve, averaging around 2% annually during the period 2025–2028, following steady growth of between 1.2 and 1.3% in 2023–2024.

It also expects the average fiscal surplus in the state budget to be just under 1.5% of GDP during same period, compared to 2.2% in 2024.

The Agency further expects the current account to register surpluses averaging 1.3% of GDP during 2025–2028, noting that Oman has been able to cover large deficits.

S&P also forecasts inflation to remain moderate, averaging around 1.5% annually over the 2025–2028 period, after standing at about 1%  in 2024.

The Agency highlights Oman’s success in reducing total public debt from 68% of GDP in 2020 to 36% in 2024, with expectations of continued decline by an average of 1.5% of GDP during 2025–2028, reaching approximately 30% of GDP by 2028.

The Agency praises Oman’s efficient public financial management, marked by tighter control over both capital and current expenditures. It also notes significant progress by the relevant authorities in enhancing transparency and data disclosure.

The Agency also commends Oman’s efforts to develop the hydrogen production sector, especially in light of the country’s commitment to achieving carbon neutrality by 2050, which is expected to position Oman as one of the leading exporters of hydrogen by 2030.

The Agency says that Oman’s credit rating could see further improvement over the next two years if the Government continues to manage public finances as planned, including increasing non-oil revenues and improving the efficiency of public spending.

S&P notes that these measures are expected to further boost GDP growth, supported by continued non-oil GDP growth, and sustained efforts to establish and grow enterprises and projects that support economic diversification activities. This includes initiatives to develop the capital market sector.