S&P revises Oman outlook to constructive on larger oil costs, reforms By Reuters

DUBAI (Reuters) – S&P International (NYSE:) Scores mentioned on Saturday it had revised its outlook on Oman to constructive from steady as a result of larger oil costs and financial reform plans which might be anticipated to slender state deficits and gradual an increase in debt ranges over the subsequent three years.

The rankings company affirmed Oman’s ‘B+/B’ long- and short-term overseas and native forex sovereign credit score rankings.

Oman, a comparatively small oil producer, is extra delicate than its hydrocarbon-rich Gulf neighbours to grease value swings, which means it was hit particularly exhausting by 2020’s value crash and the COVID-19 pandemic.

“Financial and financial pressures on Oman are easing, as the consequences of the sharp drop in oil costs in 2020 and the COVID-19 pandemic abate,” S&P mentioned in a press release.

It anticipated the fiscal deficit to lower to 4.2% of gross home product this yr from 15.3% of GDP in 2020.

However decrease oil costs from 2023 would lead to a worsening fiscal trajectory regardless of deliberate reforms, it mentioned, including that whole funding wants — fiscal deficit plus maturing debt — would stay excessive, averaging about 12% of GDP by 2024.

Oman’s debt as share of GDP hit practically 80% final yr having been little greater than 5% in 2015. The Worldwide Financial Fund final month estimated that whole authorities debt is anticipated to drop to 70% this yr.

The sultanate has begun measures previously yr to repair its funds, together with the introduction of a value-added tax and the choice to work with the IMF to develop a debt technique.