Great news for Oman’s economic outlook! Oman’s sovereign debt rating is back to investment grade. S & P Global Ratings raised its long term foreign and local currency sovereign credit ratings on Oman to ‘BBB-’ from BB+. S & P Global Ratings also raised Oman’s short-term ratings to A-3 from B and transfer and convertibility assessment to ‘BBB’ from ‘BBB-’.
This achievement highlights the effectiveness of the Medium-Term Fiscal Plan (MTFP) in reducing debt and enhancing economic stability. This upgrade reflects Oman’s improving financial outlook after the impact of global oil prices decline and COVID 19 pandemic.
As Oman moves forward, the focus will shift from merely consolidating finances to making smart investments aimed at boosting non-oil economic growth. Key initiatives include:
- Accelerating privatization timelines for State Owned Enterprises to unlock capital for new investments.
- Redirecting debt repayments towards productive capital investments and deposits into the Oman Investment Authority.
- Creating more tax and non-tax incentives for investments in key industries, in collaboration with the Tax Authority.
- Launching a local currency debt program to improve liquidity and reduce borrowing costs for both public and private sectors.
- The government’s efforts to improve the economy will keep going strong from 2024 to 2027.
- It is expected that the real GDP will grow by about 2% each year on average during this period.
- Oman’s foreign policy will likely stay neutral, which means the country should not be affected by any regional conflicts.
This strategic shift towards intelligent economic investment is vital for Oman’s future, and we are excited to see these plans unfold under the strong leadership guiding the nation.
At Bondoni, we are committed to supporting our clients in navigating these exciting changes in Oman’s economy.
We thank Frank Bracco, a Bondoni friend, for his input in this article. Frank worked as a Fiscal Expert for the Ministry of Finance in Oman in 2022/23 and is now working for the Tony Blair Institute.