Fiscal discipline helps whittle away Oman’s public debt: Expert
Published: 02:11 PM,Nov 25,2024 | EDITED : 06:11 PM,Nov 25,2024
According to the latest bulletin of the Ministry of Finance, Oman’s public debt now stands at RO 14.5 billion.
MUSCAT: The Sultanate of Oman has made significant progress in managing its finances through effective budgetary measures and resource management, in line with Oman Vision 2040. These efforts have stabilised the economy and set the country on a path to fiscal sustainability, as reflected in the latest financial results.
According to Davis Kallukaran, Managing Partner – Crowe Oman, a leading audit and business advisory firm, fiscal reforms implemented by various ministries and government authorities in the Sultanate of Oman, coupled with prudent financial resource management and improved governance practices, have enabled the country to generate sufficient surplus to reduce public debt.
To date, Oman has successfully reduced its public debt from RO 15.3 billion at the end of 2023 to RO 14.5 billion. This significant decrease in debt is a clear indication of the government’s commitment to fiscal discipline and its ability to manage public finances responsibly. The reduction in debt comes at a time when many countries are grappling with increasing financial burdens, making Oman’s achievement all the more commendable, Kallukaran noted.
A key indicator of fiscal health is the debt-to-GDP ratio, which compares a country’s total public debt to its economic output. In Oman’s case, the ratio has decreased from 36.5 per cent at the end of 2023 to 33.9 per cent today. This drop reflects the government's concerted efforts to balance its financial obligations while maintaining healthy economic growth. A lower debt-to-GDP ratio means that the government is becoming less reliant on borrowing, and the country’s fiscal situation is becoming more robust, the industry pundit explained.
The reduction in public debt also has important implications for Oman’s financial markets. By lowering its debt, the government is reducing the risk associated with its bonds, which enhances the creditworthiness of Oman. This, in turn, helps stimulate the local debt market, encouraging private sector participation and investment.
Kallukaran added, “These measures taken in line with the Oman Vision 2040 is consistent with the government’s efforts to bring down public debt and support the local debt market through a lower risk rate. This has enhanced the creditworthiness of the Sultanate of Oman.”
The government’s fiscal discipline is closely aligned with Oman Vision 2040, a strategic roadmap aimed at transforming the Sultanate of Oman into a diversified, sustainable, and globally competitive economy. Oman Vision 2040 emphasizes reducing reliance on oil revenues, improving governance, and ensuring fiscal sustainability. The reduction in public debt and the improvement in the debt-to-GDP ratio are key milestones in the journey towards these objectives.
According to Davis Kallukaran, Managing Partner – Crowe Oman, a leading audit and business advisory firm, fiscal reforms implemented by various ministries and government authorities in the Sultanate of Oman, coupled with prudent financial resource management and improved governance practices, have enabled the country to generate sufficient surplus to reduce public debt.
To date, Oman has successfully reduced its public debt from RO 15.3 billion at the end of 2023 to RO 14.5 billion. This significant decrease in debt is a clear indication of the government’s commitment to fiscal discipline and its ability to manage public finances responsibly. The reduction in debt comes at a time when many countries are grappling with increasing financial burdens, making Oman’s achievement all the more commendable, Kallukaran noted.
A key indicator of fiscal health is the debt-to-GDP ratio, which compares a country’s total public debt to its economic output. In Oman’s case, the ratio has decreased from 36.5 per cent at the end of 2023 to 33.9 per cent today. This drop reflects the government's concerted efforts to balance its financial obligations while maintaining healthy economic growth. A lower debt-to-GDP ratio means that the government is becoming less reliant on borrowing, and the country’s fiscal situation is becoming more robust, the industry pundit explained.
The reduction in public debt also has important implications for Oman’s financial markets. By lowering its debt, the government is reducing the risk associated with its bonds, which enhances the creditworthiness of Oman. This, in turn, helps stimulate the local debt market, encouraging private sector participation and investment.
Kallukaran added, “These measures taken in line with the Oman Vision 2040 is consistent with the government’s efforts to bring down public debt and support the local debt market through a lower risk rate. This has enhanced the creditworthiness of the Sultanate of Oman.”
The government’s fiscal discipline is closely aligned with Oman Vision 2040, a strategic roadmap aimed at transforming the Sultanate of Oman into a diversified, sustainable, and globally competitive economy. Oman Vision 2040 emphasizes reducing reliance on oil revenues, improving governance, and ensuring fiscal sustainability. The reduction in public debt and the improvement in the debt-to-GDP ratio are key milestones in the journey towards these objectives.