Government measures boost Oman’s credit ratings
Several experts in the economic field have confirmed that the continuous improvement and remarkable development in Oman’s credit rating by various international credit rating agencies is a result of the efforts and government measures taken to control public spending, reduce public debt, increase non-oil revenues and improve the general financial performance indicators of the state.
Engineer Mohammed bin Abubakr al Ghassani, Chairman of the Development Bank’s Board of Directors, stated that the improvement in Oman’s credit rating from various international credit rating agencies, especially by Standard & Poor’s (S&P) for credit rating — where it has risen since March 2023 from BB with a positive outlook to BB+ with a positive outlook in March 2024 — is a result of the efforts made by the government to refine government spending, maximise state financial revenues, and continue to reduce public debt, especially high-cost debt, in addition to the effectiveness of financial and economic policies within the financial sustainability programme to address sudden economic challenges and further enhance economic growth.
Al Ghassani added that the progress in credit rating is an important indicator of investors’ and borrowers’ confidence in the economy and the banking sector, enabling Oman to benefit from lower borrowing costs in the future if needed, encouraging foreign investors to enter diverse investments and large capital projects, which helps accelerate the economic diversification strategy and the objectives of Oman Vision 2040, further solidifying the administrative and financial governance of the state and the banking sector, enhancing long-term economic and financial stability.
He pointed out that this improvement in credit rating by international credit rating agencies will continue with the government’s ongoing efforts to refine government spending, reduce public debt and implement economic measures that contribute to enhancing economic growth.
On the other hand, Dr Yousuf bin Hamed al Balushi, an economic expert, stated that there are significant positive implications for improving Oman’s credit rating from various aspects, especially in providing finance at an appropriate cost for both the government and Omani commercial banks, reflecting the availability of this financing at a relatively lower cost, which will help boost it into the Omani economy in the next stage.
The economic expert emphasised that local and foreign investors consider credit rating as an important indicator for their investment decisions, and the continuous improvement is attributed to several reasons, the most important being oil prices, government financial policies, and the accumulation of foreign exchange reserves.
He further explained that the improvement in Oman’s credit rating provides a great opportunity to boost the Omani economy and take advantage of these favourable conditions to expand the economic base and obtain larger funding for projects, striving to achieve the goals of Oman Vision 2040.
In turn Dr Khalid bin Saeed al Amri, Chairman of the Omani Economic Association, clarified that Oman has achieved numerous developments that have had a positive impact on the creditworthiness of the national economy; as S&P raised the outlook for Oman from stable to positive and confirmed the rating at “BB+”, emphasising the success of the economic and financial policies taken in line with national priorities and the objectives of the Tenth Five-year Development Plan and the strategic directions of Oman Vision 2040.
Al Amri said that the improved future outlook by S&P acknowledges that Oman is heading in the right direction to improve the investment environment and enhance investors’ confidence in the national economy, attracting foreign investment and improving the business environment and the ability of banks and financial institutions to obtain finance at lower costs, reducing the cost of public debt service and enhancing the government’s reliability in meeting its obligations towards others, pointing out that among the reasons for adjusting the future outlook was the reduction of public debt; as it reached around RO 17.6 billion by the end of 2022 but decreased to RO 15.2 billion by the end of 2023, which is a significant achievement reflected in the improvement of Oman’s creditworthiness.
He emphasised that the development in Oman’s credit rating by S&P agency from “BB” with a positive outlook to “BB+” with a positive outlook in about a year confirms the seriousness of the government to continue implementing measures aimed at strengthening the financial position and improving its indicators in addition to the economic measures that enhance economic growth and continue to reduce the public debt of the state.
THE IMPROVEMENT IN OMAN’S CREDIT RATING PROVIDES A GREAT OPPORTUNITY TO BOOST THE OMANI ECONOMY AND TAKE ADVANTAGE OF THESE FAVOURABLE CONDITIONS TO EXPAND THE ECONOMIC BASE AND OBTAIN LARGER FUNDING FOR PROJECTS, STRIVING TO ACHIEVE THE GOALS OF OMAN VISION 2040.