MUSCAT: Fitch Ratings has revised Oman’s Outlook to Stable from Negative while affirming the sovereign’s Long-Term Foreign- and Local- Currency Issuer Default Ratings (IDR) at ‘BB-‘.

“The revision of the Outlook reflects actual improvements in, and the expected evolution of, key fiscal metrics including government debt/GDP and the budget deficit, driven by higher oil prices and fiscal reforms, and a lessening of external financing pressures relative to recent years even as external funding needs remain high,” Fitch Ratings said.

“We estimate that the budget deficit narrowed to 3.4% of GDP in 2021, from 16.1% of GDP in 2020. Hydrocarbon revenue grew by a third, according to our estimates, driven largely by a 28% rise in Oman’s average fiscal oil price, and likely accounted for more than half of the narrowing in the budget deficit,” the statement noted.

The government, according to Fitch Ratings, has made progress with implementation of its medium-term fiscal plan (MTFP), which aims to balance the budget and lower government debt/GDP to 61% by 2025.