Experts welcome Oman's improving credit rating
Three of Oman's leading economic experts say the improvement in the Sultanate's international credit rating provides a significant opportunity to boost the Omani economy, expand the economic base and obtain greater funding for projects, pushing towards achieving the targets of “Oman Vision 2040”.
They say that the continuing improvements in Oman's rating by various international credit rating agencies are the result of measures taken by the Government. These include efforts to control public spending, reduce public debt, increase non-oil revenues and enhance the state public sector's financial performance.
Engineer Mohammed Al Ghassani, Chairman of the Oman Development Bank, welcomed the general improvement in Oman's international credit rating, particularly Standard & Poor's, which rose from BB with a positive outlook in March 2023 to BB+ with a positive outlook in March 2024.
He said that this is the fruit of the Government's recent efforts to control government spending, maximise state financial revenues and to continue reducing public debt, especially high-cost debt. He added that this is also due to the effectiveness of fiscal and economic policies of the financial sustainability programme to deal with sudden economic challenges while continuing to promote economic growth.
The Development Bank Chairman said the progress in Oman's credit rating is an important indicator of investor and borrower confidence in the Sultanate's economy and its banking sector. This will benefit Oman, as it will be able to obtain future loans at lower cost, encouraging foreign investors to engage in large capital investments, thereby accelerating economic diversification and progress towards the objectives of “Oman Vision 2040”. Overall, he added, it reinforces the administrative and financial governance of the state and the banking sector, enhancing long-term economic and financial stability.
The Chairman said that this improvement in international credit ratings should continue with the government's ongoing efforts to control government spending, reduce public debt and to implement measures to boost economic growth.
Dr Yousuf Al Balushi, an economic expert, shares this positive analysis, noting the significant positive implications of Oman's improving credit rating. He said these include the availability of lower cost financing for both the Government or Omani commercial banks which can then be injected into the Omani economy.
Dr Al Balushi explained that local and foreign investors regard credit ratings as an important indicator for their investment decisions. He added that the continuing improvement can be attributed to several factors, including oil prices, government fiscal policy and the accumulation of foreign exchange reserves.
Dr Khaled Al Amri, Chairman of the Omani Economic Association, said that the improvement in the future outlook by Standard & Poor's acknowledges that Oman is moving in the right direction to improve the investment environment and enhance investor confidence in the national economy.
He agreed that this will help attract foreign investment, improve the business environment and enhance the ability of banks and financial institutions to obtain funding at lower costs, thereby reducing the cost of servicing public debt and enhancing the government's reliability in meeting its obligations. He noted that one of the reasons for adjusting the future outlook is a fall in public debt, which decreased from OMR 17.6 billion at the end of 2022 to OMR 15.2 billion at the end of 2023. This decrease of 13.63%, reflects an important achievement that has contributed to the improvement of Oman's creditworthiness, he added
He emphasised that the improvement in Oman's credit rating, confirms the government's seriousness in continuing to implement measures aimed at strengthening the financial position and improving its indicators, in addition to the economic measures adopted to promote economic growth and continue reducing the state's public debt.
This is an unofficial English version of an Arabic report. To view the official Arabic text, click here.