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S&P revises Oman outlook to optimistic on larger oil costs, reforms

DUBAI, Oct 2 (Reuters) – S&P Global Ratings mentioned on Saturday it had revised its outlook on Oman to optimistic from steady as a consequence of larger oil costs and monetary reform plans which are anticipated to slim state deficits and sluggish an increase in debt ranges over the subsequent three years.

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

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

“Economic and fiscal pressures on Oman are easing, as the effects of the sharp drop in oil prices in 2020 and the COVID-19 pandemic abate,” S&P mentioned in an announcement.

It anticipated the fiscal deficit to lower to 4.2% of gross home product this 12 months from 15.3% of GDP in 2020.

But decrease oil costs from 2023 would end in a worsening fiscal trajectory regardless of deliberate reforms, it mentioned, including that complete 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 12 months having been little greater than 5% in 2015. The International Monetary Fund final month estimated that complete authorities debt is anticipated to drop to 70% this 12 months.

The sultanate has begun measures prior to now 12 months 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.

Reporting by Ghaida Ghantous; Editing by Alexander Smith

General view of old Muscat the day after Oman's Sultan Qaboos bin Said was laid to rest in Muscat, Oman, January 12, 2020. REUTERS/Christopher Pike/File Photo