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Oman was upgraded to BB+ from BB by S&P given its “improved resilience” to external shocks due to positive oil sector prospects and deleveraging, alongside structural reforms. S&P expects Oman’s real GDP growth to average at 2% over 2023-2026 despite a slowdown this year due to oil production cuts. With a 1.8% of GDP fiscal surplus in 2022, surpluses are expected to continue to 1.4% through 2024. The rating agency expects Brent crude to average $83/bbl in 2023 and $85/bbl in 2024 thus helping the government use its fiscal surpluses to repay debt. Its debt-to-GDP is also expected to fall to 38% in 2023 from 40% a year ago. Besides, the economy could see a benefit from large scale investments in the green hydrogen sector further helping growth. Last week, Fitch also upgraded Oman to BB+ thus taking it just a notch away from IG-status.
Oman’s dollar bonds were trading stable with its 5.625% 2028s at 97.5, yielding 6.30%.