The Ministry of Finance said the recent Moody’s rating, which resulted in a one-point downgrade of the Sultanate’s credit rating, was equivalent to the credit rating granted by Fitch and two points higher than Standard & Poor’s (S&P).
The ministry said in a statement to Oman News Agency (ONA) that the Moody’s rating for the Sultanate is still in the “investment grade”. It said Moody’s had based its assessment on grounds that the measures taken so far were insufficient considering the quantum of decline in revenues.
It said the international rating agencies focused mainly on the financial indicators, the financial position of the state, which includes income, expenditure, deficit and ability to finance the deficit and its impact on the financial reserves.
The ministry said it is clear that the financial situation of the Sultanate has been greatly affected by sharp and prolonged decline in oil prices, the main source of government income.
Consequently, the government has taken a range of measures since the emergence of indicators of oil prices slump late 2014, but some of the results of these actions will take some time to show their effect.
It said the government, taking into account social and economic effects of any rapid and sharp measures, has followed the “principle of gradualism” in the face of this crisis. Further, the government is constantly following the developments of financial conditions.
It will take appropriate and balanced measures to maintain the integrity and stability of the financial and economic situation of the state as the financial procedures may have a deflation effect.
The ministry said it is hoped the measures taken by the government create a conducive environment for both domestic and foreign investments and thus achieve appropriate growth rates in the national economy. — ONA
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