Standard & Poor's Agency has revised the outlook for the Sultanate of Oman to positive from stable due to high oil prices and financial reform plans that are expected to reduce the deficit and slow the increase in debt levels in the next three years. Meanwhile, the agency maintained the long and short term credit rating of Oman's sovereign debt in both local and foreign currencies at B/B+.
The agency indicated that economic and financial pressures on the Sultanate of Oman are easing, and the effects of the sharp drop in oil prices in 2020 and the Covid-19 pandemic are easing, it also expected the fiscal deficit to shrink to 4.2 percent of GDP this year from 15.3 percent in 2020.
According to S&P, the decline in oil prices starting from 2023 will lead to a deteriorating financial path, despite the planned reforms. Disclosing that the overall financing needs, the fiscal deficit, as well as the outstanding debt, will remain high and will average about 12 percent of GDP in 2024.
It is worth noting that last year, Oman's debt-to-GDP ratio reached nearly 80 percent, after it was just over 5 percent in 2015. According to the IMF estimates, the total government debt is expected to drop to 70 percent this year.
Source (Asharq Al-Awsat Newspaper, Edited)
