RIYADH: S&P Global Ratings revised up Oman’s credit outlook to positive from stable on the expectation that the sultanate’s reform program will limit increases in government debt in the coming years.
Oman’s credit rating was affirmed at ‘B+/B’. S&P downgraded Oman’s long-term sovereign credit rating to B+ from BB- in October 2020 due to the projected material deterioration of public sector finances.
“The positive outlook indicates that we consider that Oman’s reform program, and the higher oil prices relative to 2020, will narrow fiscal deficits and slow the increase in net government debt over the next three years,” Dubai-based credit analyst Zahabia Gupta wrote in a rating note.
S&P said it could raise its ratings on Oman over the next 12 months if planned fiscal reforms and stronger economic growth sustainably reduce fiscal imbalances and the stock of net government debt beyond its current expectations.
However, it could revise the outlook to stable if it saw risks to fiscal reform implementation that could reduce the government’s ability to maintain sustainable public finances, Gupta said.
S&P could also revise the outlook to stable if external debt issuances by government-related
enterprises increased the country’s external debt metrics more than it currently expects.
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