Oman has been upgraded by Fitch from BB- to BB, with a stable outlook. This was prompted by a significant improvement in the Middle Eastern sovereign’s fiscal position, mainly due to a huge jump in oil and gas revenues. It posted a budget surplus of OMR 784mn ($2bn) in 1H 2022 and also reduced total public debt by 11% since end-2021 to OMR 18.6bn ($48.2bn). Fitch expects Oman to maintain a budget surplus to GDP ratio of 5.5% and 3.4% in 2022 and 2023 respectively, the nation’s first surplus since 2013. The rating agency also anticipates that government debt to GDP will fall to 46.7% and 44.9% in 2022 and 2023 respectively compared to 70% in 2020. In the same vein, Oman’s strong oil and gas revenues will boost its foreign reserves and allow it to further cut net debt as its current account surpluses widen. While Oman’s oil revenues are expected to drive its improving outlook in the next 18 months, it is expected to taper-off in 2024. Oman is currently rated Ba3 by Moody’s and BB- by S&P.

Oman’s 6.75% 2027s fell 0.56 points to currently trade at 106.84, yielding 5.23%.

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