Oman Budget 2021: Efforts to improve credit ratings

Muscat: The Government is putting efforts to improve Oman’s credit rating by reducing public debt and containing the deficit within sustainable levels.

Moody's, Standard & Poor’s, and Fitch have downgraded Oman’s credit rating from a safe investment category in 2014 to a high-risk level of investment category in October 2020. The downgrade comes after a sharp fall in oil revenue, which has led to a persistent deficit over the past six years and a high level of public debt. In addition to the expected continued effects of the COVID-19 pandemic on Oman’s economy.

Credit Rating Grade (2014- October 2020):

The COVID-19 pandemic, in a low oil price environment, has triggered tremendous challenges for the national economy, which have prompted the Government to undertake a set of precautionary measures to contain the spread of the coronavirus, such as:

• Border closures.


• Partial lockdown and closure of all public places and some of the commercial stores.


• Reduction in workplace attendance.

Such measures have reflected negatively on economic activity and public finance. By the end of the second quarter of 2020, the country’s GDP experienced a decline by 13.4% at current prices, recording RO 12.3 billion compared to RO 14.1 billion over the same period in 2019, according to National Centre for Statistics and Information (NCSI). This decline is driven by a reduction in the value-added of oil activities by 20%, registering RO 4.1 billion by the end of the second quarter of 2020. In addition to a decline in the value-added of non-oil activities by 9.9%, recording RO 8.7 billion. Moreover, the Ministry of Economy estimates the GDP at current prices to stand at RO 24.7 billion by the end of 2020.

The Government has undertaken a number of measures and initiatives to stimulate the economy, sustain public finance in alignment with Oman Vision 2040 and Tenth Five-Year Plan.

Moreover, the Ministry of Economic issued a Ministerial decision No. (148/2020) on the formation of a working group that aim to suggest policies and initiatives required to stimulate national economy in light of the consequences caused by the COVID-19 pandemic.