Oman was upgraded to Ba2 from Ba3 by Moody’s citing improvements in its debt burden and debt affordability metrics during 2022. Moody’s noted the improvement was mainly on the back of a large oil and gas revenue windfall. Whilst their fiscal metrics improved, the nation’s spending restraint and decision to use its fiscal surplus and previously accumulated buffers to pay down over 15% of its outstanding debt was a major positive. This highlighted fiscal policy effectiveness and governance strength. The revenue windfall on account of oil and gas demand translated into a fiscal surplus of 3.4% of GDP in 2022 vs. a deficit of 3.2% of GDP in 2021. Of this, hydrocarbon revenue rose by over 30% being a significant contributor. Effective fiscal policy has seen Oman’s debt burden fall to 40% of GDP in 2022 vs. 61% of GDP in 2021.

Oman’s dollar bonds were trading stable with its 6.25% 2031s at 103.4, yielding 5.7%.

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