Fitch upgrades Oman’s credit rating from BB+ to BBB-

New York: Fitch Ratings has upgraded the Sultanate of Oman's credit rating in its report issued on Monday from 'BB+' to the investment grade level of 'BBB-' with a stable outlook. This upgrade results from the continued improvement in the state's public finance indicators, external financial position, and Fitch’s growing confidence in Oman's ability to continue adhering to prudent fiscal policies that enable it to deal with oil price volatility, maintain a moderate budget deficit, and stable public debt levels.

In its report, the Fitch indicated that Oman has successfully entrenched fiscal discipline, managing to significantly reduce the volume of public debt to approximately 36 percent of GDP in 2025, compared to around 68 percent in 2020.

Fitch expects the state's general budget deficit to remain at safe levels, close to one percent of GDP during 2026–2027, assuming an average Brent crude price of $63 per barrel. Meanwhile, the fiscal break-even oil price is estimated at around $67 per barrel for the same period.

Regarding economic growth, Fitch projected GDP growth of approximately 4 per cent in 2025, compared to about 1.6 per cent in 2024, supported by strong non-oil sector growth of around 3.8 per cent, alongside an acceleration in oil sector growth due to the easing of production constraints by the OPEC+ group.

Domestic spending, foreign direct investment inflows, and growing tourism activity are likely to continue supporting non-oil growth to remain above 3.5 per cent over the next two years, 2026-2027.

The report highlighted the qualitative shift in Oman's external financial position to a positive indicator, as it became a net creditor in 2024 at 2 per cent of GDP. This marks a significant shift compared to its status as a net debtor in 2021, resulting from government efforts to repay due debts, reduce public corporate indebtedness, the growth of external assets, and the improved soundness of the external financial position due to reserve growth.

Fitch confirmed that Oman's credit rating could rise further in the future if the general budget's ability to withstand oil price fluctuations is enhanced by broadening non-oil revenue sources, and if the financial position continues to improve through ongoing public debt reduction and repayment of dues, in addition to increasing the strength of external reserves and the growing size of assets in the sovereign wealth fund. It is noteworthy that Oman's credit rating has been upgraded to investment grade by all major credit rating agencies.

Fitch's report, upgrading the rating to this level, represents another important achievement reflecting the success of the prudent economic and fiscal policies followed by Oman in recent years. It opens promising prospects for further foreign investment and strengthens confidence in the national economy, supporting the sustainable development and economic diversification journey witnessed by Oman under 'Oman Vision 2040.'