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.
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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.
