Fitch Ratings has upgraded the outlook for Oman from stable to positive, maintaining the country's credit rating at 'BB+'. This adjustment is attributed to a decline in government and state-owned enterprise debt, alongside a strong fiscal management record and an increase in sovereign foreign assets.
The agency forecasts a budget surplus of 2% of GDP for 2024, with a gradual decrease to 0.7% in 2025, before a slight deficit of 0.2% in 2026. These estimates are based on projected Brent oil prices averaging $70 per barrel in 2025 and $65 in 2026.
Fitch anticipates an improvement in Oman's non-oil primary balance, projecting a reduction in the non-oil primary deficit to 27% of non-oil GDP in 2024, down from 43% in 2020. Overall GDP growth is expected at 1.8% in 2024, driven by a non-oil growth rate of 3.7%.
The government debt-to-GDP ratio is predicted to decline to 34% by the end of 2024, with external debt decreasing by nearly $2.8 billion, bringing it to $26.6 billion, or 24% of GDP. Oman's sovereign net foreign assets are expected to improve significantly, recovering to nearly 10% of GDP in 2024.
Additionally, the Central Bank of Oman announced plans to issue government development bonds worth OMR75 million ($194.83 million), with a maturity of five years and a coupon rate of 4.75%. The subscription period runs from October 27 to 31, with the auction set for November 3 and the official issue date on November 5.