S&P affirms Oman’s credit rating at ‘BBB-’ with stable outlook

MUSCAT: In a significant boost to investor confidence, Standard & Poor’s Global Ratings (S&P) has reaffirmed the Sultanate of Oman’s long-term sovereign credit rating at ‘BBB-’ with a Stable Outlook, citing the country’s attractive investment environment and sustained fiscal reforms.

The decision to maintain the rating reflects several key developments in Oman’s macroeconomic and fiscal landscape. Notably, S&P credited the continued improvement in the State’s fiscal performance, which has been underpinned by prudent fiscal management, a reduction in budget deficits, and the implementation of structural reforms. The government’s ongoing efforts to reduce public debt were also acknowledged as a positive factor, signaling Oman’s commitment to long-term financial sustainability.

Additionally, the rating agency highlighted the enhanced resilience of the government’s fiscal position, which has improved significantly due to stronger budgetary discipline and effective policy execution. Another contributing factor is the strengthening of governance frameworks in state-owned enterprises, which play a critical role in Oman’s broader economic framework.

In its forward-looking projections, S&P outlined several key expectations for the Omani economy over the period 2025–2028. The agency anticipates real GDP growth of 2 per cent, driven by diversification efforts and continued investment in both the oil and non-oil sectors. It also forecasts a 1.5 per cent surplus in the State’s general budget, which reflects healthy revenue streams and controlled expenditures.

Moreover, the current account is expected to maintain a 1.3 per cent surplus, supported by stable oil revenues and improving export performance. In terms of public debt, S&P projects a gradual decline in net public debt to an average of 1.5 per cent of GDP over the same period. These projections are based on the assumption of average oil prices at US$70 per barrel for 2025–2026, alongside moderate inflation averaging around 1.5 per cent.

Oman’s credit rating has shown a notable upward trend over the past year. In March 2024, S&P upgraded Oman to BB+ with a Positive Outlook. This was followed by another upgrade in September 2024, when the rating improved to BBB- with a Stable Outlook. The reaffirmation in March 2025 confirms the stability of the Sultanate’s macroeconomic framework and the success of ongoing reforms.

S&P further indicated that Oman’s rating could witness additional improvements over the next two years, provided the government continues to implement its fiscal and structural reform agenda. The agency emphasized the importance of adhering to existing plans focused on increasing non-oil revenues and enhancing spending efficiency. These measures are expected to reinforce GDP growth, particularly in the non-oil sector, while supporting broader economic goals under Oman Vision 2040.

Finally, the report underscored the significance of initiatives aimed at economic diversification and capital market development, which are essential for sustaining long-term economic resilience and improving the overall investment climate.