Standard & Poor's has affirmed the credit rating of the Sultanate of Oman at the investment grade level of "BBB-", maintaining a stable outlook due to the strength of the Sultanate of Oman's financial and external positions, and the continued availability of precautionary reserves supporting creditworthiness in the face of regional geopolitical developments.
The agency explained in its credit rating report on the Sultanate of Oman issued today that the stable outlook is based on the Sultanate of Oman having liquid government assets exceeding 40 percent of GDP, along with total foreign exchange reserves approaching 20 percent of GDP, which enhances the Sultanate of Oman’s ability to absorb shocks and maintain stability in public finances and external position, noting that the Sultanate of Oman’s geographical location has enabled it to continue exporting oil and gas without interruption despite the geopolitical tensions in the region.
The agency indicated in its report that the extended repercussions of regional developments contributed to a remarkable improvement in the Sultanate of Oman’s trade exchange indicators, which supports the performance of public finances and the external position, as the agency expects real GDP growth to reach about 1.4 percent in 2026, then recover again to reach an average of about 2.3 percent during the period (2027-2029).
This is attributed to expectations of continued activity in non-oil sectors, rising oil prices, and increased oil production in the medium term, with the average price of Brent crude expected to reach about US$80 per barrel in 2026, before decreasing to about US$65 per barrel during the period (2027-2029).
The agency clarified that the government is expected to achieve fiscal balance in the state budget for 2026, after revising its previous estimates (the agency's report issued in September 2025), which had indicated a slight deficit. It also projected relatively stable fiscal surpluses averaging 0.4 percent of GDP during the period 2027-2029, driven by continued control of public spending, along with growth in non-oil revenues and a moderate increase in oil and gas production.
On the other hand, the agency projected that government public debt would decline to 31 percent of GDP in 2029, compared to approximately 35 percent in 2025. It is also anticipated that liquid assets would remain strong, averaging 40 percent of GDP in the coming years, with foreign reserves remaining within the range of US$19 billion to US$21 billion until 2029.
The agency also predicted that the current account would continue to generate surpluses, recording about 2.3 percent of GDP in 2026, and an average of 2 percent during the period (2027-2029), benefiting from export flows and improved trade exchange indicators.
It also indicated that inflation rates will remain moderate, averaging around 1.5 percent annually during the period (2025-2028). The agency explained that the Sultanate of Oman's efforts in managing public finances, including controlling current and capital expenditures, rationalizing subsidies, continuing measures to improve the efficiency of public spending, and enhancing non-oil revenues, have contributed to reducing the impact of the current situation.
On the economic side, the agency expects the Sultanate of Oman to continue diversifying its economy, particularly in the renewable energy, green hydrogen and low-carbon ammonia sectors, in light of the Sultanate of Oman’s targets to reach zero carbon neutrality by 2050, which will enhance its position as a promising regional hub in the clean energy sector and support sustainable growth in the medium and long term.
The agency confirmed that Oman’s credit rating could improve over the next two years if geopolitical tensions subside, measures to strengthen institutions, support economic diversification, increase non-oil revenues, and improve the efficiency of public spending continue, and there is further improvement in fiscal buffers and the external position.
The Government of the Sultanate of Oman affirms its commitment to continuing to manage public finances and public debt as planned, and to continue implementing the approved borrowing plan for 2026, while fulfilling all its financial obligations.
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