Trust: How Oman rebuilt its credit reputation

Trust isn’t a press release. It’s the interest rate on a bond, the colour on a ratings screen and the quiet confidence that tells an investor: “Your money is safe here”.
Over the past five years, Oman has treated trust like national infrastructure — built brick by brick, with discipline and patience. You can see the result not in slogans, but in prices, ratings and real projects breaking ground.
When His Majesty Sultan Haitham bin Tarik took the helm in 2020, the backdrop was difficult: volatile oil prices, rising debt, jittery markets. The response was steady rather than flashy — tighten the public purse, improve how the state manages its finances and retire obligations on time. That approach has now matured into a reputation: Oman does what it says, when it says it.
Credit agencies — those gatekeepers of global capital — have noticed. In July 2025, Moody’s lifted Oman to Baa3 (stable). By late September, S&P affirmed BBB-/A-3 (stable). Ratings don’t build roads or factories on their own, but they decide which investors are allowed to buy your debt and at what cost. In plain terms: better ratings mean cheaper money, longer horizons and fewer surprises.
Debt tells the same story. By the second quarter of 2025, public debt had eased to about RO 14.1 billion, roughly a third of GDP. Then, in October, the government issued a $1 billion sukuk and simultaneously bought back $303 million of 2026 notes. That’s not theatre; it’s housekeeping — spreading out maturities, cutting near-term refinancing risk and signalling to the market that Oman is managing its liabilities, not being managed by them.
Price stability matters to families and financiers alike. Official figures put inflation at just 1.1% year-on-year in September 2025, averaging 0.8% for the first nine months. Low, predictable inflation protects real incomes, steadies business planning; and helps banks and investors price ten-year commitments without guessing what groceries will cost next summer.

Growth is gradually changing shape, too. The IMF projects real GDP growth of 2.9% in 2025, up from 1.7% in 2024. More importantly, non-oil activity — manufacturing, logistics, tourism, technology — has become the stabiliser. Diversification, so often promised in the region, is becoming a lived reality: a wider base carrying more of the load.
Energy transition is where trust turns into bankable contracts. Hydrom has shifted hydrogen from concept to pipeline: nine major projects awarded, more than $50 billion in committed investment and a ~1.4 million tonnes per year target by 2030. The model is the quiet hero here — transparent auctions, defined land blocks, shared infrastructure for water and power and a clear regulatory path. That reduces risk premiums and invites serious, long-term capital.
Foreign investors are responding. FDI stock reached RO 30.6 billion by the first quarter of 2025, up on the year. Oil and gas still anchor the totals — naturally — but we’re seeing broader interest in renewables, industrial estates and financial services. The next step is to tilt more of those inflows into tradable non-oil value chains: green metals, advanced manufacturing, data-driven services.
Two policy choices deserve credit for shaping this credibility.
First, treating liability management as a strategy. Issuing in good windows, redeeming near-dated paper and smoothing the redemption profile — all of it says Oman is a disciplined borrower. Markets recognise that behaviour and, over time, reward it with tighter spreads.
Second, broadening the revenue base with the Personal Income Tax Law (Royal Decree 56/2025) — a modest 5% rate on annual incomes above RO 42,000, effective 1 January 2028. Agree or disagree on design, the message is clear: fiscal sustainability won’t rest solely on oil cycles. That reassures creditors and investors who plan beyond the next barrel.
What should continue? Three practical aims.
•Deepen local capital markets so more borrowing and investment can be done in rials, with pension and insurance demand anchoring a longer-dated curve.
•Lift SOE governance with clearer KPIs, dividend policies and independent boards—because governance is a cost-of-capital variable.
•Lock in offtake for green projects, turning pipelines into project finance through bankable contracts and common-use infrastructure.
Oman has moved from managing crises to managing credibility. That shift shows up as lower borrowing costs, calmer inflation and a more balanced growth mix. Trust, once rebuilt, compounds like interest: the more consistently you earn it, the cheaper and faster progress becomes. Keep doing the simple things — on time, in full, in the open — and the market will keep doing the complicated things: showing up, pricing down and staying for the long haul.