Oman's financial stability is intact; Geopolitical tensions pose challenges: CBO
Published: 07:09 AM,Sep 25,2025 | EDITED : 11:09 AM,Sep 25,2025
The global financial environment remains fragile amid persistent geopolitical tensions in the Middle East and Europe, and elevated trade policy uncertainty, according to the CBO Financial Stability Report 2025.
Global growth projections have been revised slightly downward, reflecting weaker-than-expected performance in advanced economies and a deceleration in global trade momentum.
Global growth projections have been revised slightly downward, reflecting weaker-than-expected performance in advanced economies and a deceleration in global trade momentum.
Although global inflationary pressures have generally eased following monetary tightening and stabilizing energy prices, inflation risks have not been fully contained.
A renewed upswing in inflation could emerge from trade tensions, renewed
supply chain disruptions, and rising shipping costs associated with recent geopolitical escalations, which may potentially impact global energy markets and trade routes.
Despite these external headwinds, financial stability in Oman remains broadly intact, according to the report.
The banking sector is well-capitalized and maintains robust liquidity buffers, supported by prudent regulatory oversight. Fiscal and external positions have improved, driven by sustained fiscal discipline and favorable oil revenues.
Nevertheless, the outlook is increasingly clouded by external uncertainties.
Prolonged geopolitical tensions, oil price volatility, and spillovers from weaker global growth could pose challenges to financial stability. Therefore, continued vigilance and proactive risk monitoring will be crucial to safeguarding financial stability in the period ahead, the report said.
In 2025, S&P reaffirmed Oman’s investment-grade credit rating at BBB- with a stable outlook, following the upgrade in September 2024.
Reflecting growing confidence in the Oman’s fiscal management, Moody’s upgraded Oman to Investment grade in 2025.
These assessments were driven by successful public debt rationalization,
Reflecting growing confidence in the Oman’s fiscal management, Moody’s upgraded Oman to Investment grade in 2025.
These assessments were driven by successful public debt rationalization,
sustained fiscal discipline, and progress in economic diversification, all supported by a resilient financial sector.
The positive ratings underscore the enhanced trust in Oman’s economic policies and its long-term growth prospects.
The positive ratings underscore the enhanced trust in Oman’s economic policies and its long-term growth prospects.
Despite notable progress in the diversification efforts, Oman remains heavily reliant on hydrocarbon revenues.
Consequently, any protracted decline in oil prices could adversely affect fiscal and external balances and pose challenges to macroeconomic and financial stability.
Consequently, any protracted decline in oil prices could adversely affect fiscal and external balances and pose challenges to macroeconomic and financial stability.