Fitch Upgrades Oman’s Credit Rating to ‘BB’

Oman's improved credit rating is driven by several factors, according to Fitch Ratings:

• significantly improved fiscal metrics, driven by higher government revenues as oil prices have been at higher levels

• the expectation of budget surpluses in 2022 (5.5% of GDP) and 2023 (3.4%) supported by high oil prices

• reduced leverage, with government debt-to-GDP expected to fall from c. 70% in 2020 to 46.7% in 2022 and 44.9% in 2023, before increasing again to 50% by 2025, as per the rating agency’s forecasts

• lower debt refinancing risk, as the government has completed its external funding needs for this year and reduced its unfunded 2023 maturities

• improved GDP growth of 4.4% in 2022 – up from 3% in 2021 – driven mainly by the oil sector

Those factors are somewhat counteracted by the challenges Oman faces, including:

• Fitch Ratings expects government spending to exceed its budget by 6% in 2022

• certain structural challenges