Oman was upgraded to BB from BB- by S&P upon the nation’s fiscal and external positions “benefiting from government reforms and higher oil prices”. The government has reduced reliance on oil receipts to its budget, inline with its medium-term fiscal plan through 2025. S&P expects fiscal reforms to continue. including possible introduction of personal income tax on high earners and measures to VAT receipts. S&P noted that in 1H 2022, Oman engaged in several liability management exercises including a voluntary buyback of $700mn in dollar bonds. The rating agency estimates that government debt will decline to $46.6bn (42% of GDP) by end-2022 from $54.7bn (61% of GDP) at end-2021. Also, government-related entities (GREs) expect to repay their debt instead of refinancing, where possible. S&P expects Brent to average $90/bbl in 2023 and $80/bbl in 2024, from its earlier estimate $85/bbl and $55/bbl. If this occurs, it is set to benefit the Omani government revenue and current account receipts in those years.

Oman’s dollar bonds were trading stable at 6.25% 2031s at 100.48, yielding 6.18%

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