Fitch Ratings released its latest credit report on Oman, revising the Sultanate’s outlook from stable to positive.  It confirms Oman’s credit rating at BB+.

The upgrade in outlook reflects ongoing government measures to reduce public debt and the debt of state-owned enterprises, maintain fiscal discipline, and increase net sovereign foreign assets.

The agency expects Oman to achieve a fiscal surplus of 2% of GDP in 2024, declining to 0.7% in 2025, and potentially turning into a fiscal deficit of 0.2% in 2026.

These projections are based on Brent crude oil prices averaging $70 per barrel in 2025 and $65 per barrel in 2026, with the fiscal breakeven oil price estimated between $67 and $70 per barrel.

Fitch noted that Oman’s non-oil primary balance is expected to improve gradually due to controlled spending and more efficient tax collection. The non-oil primary deficit as a percentage of non-oil GDP is projected to decrease from 43% in 2020 to 27% in 2024 and to 24% by 2026.

The report forecasts GDP growth of 1.8% in 2024, supported by a 3.7% increase in the non-oil sector. Factors such as rising domestic consumption, foreign investment growth, and an improved tourism sector are expected to drive the non-oil sector’s growth to more than 3% in 2025 and 2026.

Fitch also anticipates a decline in public debt as a percentage of GDP from 37.5% in 2023 to 34% in 2024, reaching 33.3% by 2026.

External debt is expected to decrease by $2.8 billion in 2024, bringing it to around $26.6 billion. Oman’s net sovereign foreign asset position is projected to rise to about 10% of GDP in 2024, compared to -9% of GDP in 2020.

The agency says that Oman’s credit rating could be upgraded if fiscal consolidation efforts continue, public debt as a percentage of GDP decreases further, non-oil revenues grow, and foreign currency reserves increase.