Muscat: Global rating agency Standard & Poor's on Saturday affirmed Oman's credit rating at (BB-), with a stable outlook, due to financial and economic initiatives and measures taken for sustainability, in addition to the improvement in oil prices.
The agency stated in its report issued on Saturday that it is expected that the financial measures taken by the government under the Medium-Term Financial Plan, and the improvement in oil prices, will contribute to strengthening the financial position of the Sultanate of Oman for the current and next year.
The agency expects that the average oil prices will reach about $100 per barrel during this year and around $85 per barrel in 2023.
S&P that the average oil price is expected to decline from 2024 to approximately $55 per barrel on an annual basis, noting that the drop in oil prices will lead to burdens on public finances, and the Sultanate of Oman should pay attention to this when it sets forth the upcoming policies and procedures.
The agency confirmed that the rise in production and oil prices and the increase in the pace of investment projects contributed to the growth of the Omani economy, noting the growth of the Gross Domestic Product at constant prices of three percent in 2021, and its rise to about 3.9 percent in 2022.
S&P said the average growth rate of GDP at constant prices will reach about 2.2 percent during the period 2023-2025. It also expects the non-oil sector to grow at an average of two percent during the period 2024-2025, compared to a growth of about 1.8 percent in 2022.
Standard & Poor also indicated that the government has benefited from the rise in oil revenues in reducing the volume of public debt, bringing the public debt-to-GDP ratio to 63 percent, down to 45 percent in 2021 and 2022, respectively.
The agency indicated that the credit rating of the Sultanate of Oman may rise during the coming period if the measures continue to enhance the financial position and balance of payments of the Sultanate, as the rating may be affected in the event of lax implementation of financial measures or the occurrence of unexpected factors that lead to high levels of fiscal deficit and the size of the fiscal deficit. The net public debt exceeds the agency's expectations.
It may be noted that Standard & Poor's has improved the rating of the Sultanate of Oman in April this year from its previous rating of (B+) to become a rating index of (BB-).