Standard & Poor's revised Oman's rating to positive

 Standard & Poor's, the credit rating agency, said today, Saturday, that it revised its outlook for the Sultanate of Oman to "positive" from "stable".

This came as a result of high oil prices and fiscal reform plans, which are expected to reduce the state's deficit and slow the increase in debt levels in the next three years.

The agency affirmed the long- and short-term credit rating of Oman's sovereign debt in both local and foreign currencies at "BB+".

The agency said in a statement: "Economic and financial pressures on Oman are easing, and the effects of the sharp drop in oil prices in 2020 and the Corona pandemic are abating."

Standard & Poor's expects the fiscal deficit to shrink to 4.2 percent of GDP this year, from 15.3 percent in 2020, according to "Reuters".

But the agency said that lower oil prices, starting from 2023, will lead to a deteriorating fiscal path, despite the planned reforms.

She noted that the overall financing needs, the fiscal deficit, as well as the outstanding debt, will remain high and will average about 12% of GDP in 2024.

The debt-to-GDP ratio in Oman reached nearly 80% last year, after it was just over 5% in 2015.

The International Monetary Fund estimated last month that total government debt is expected to fall to 70% this year.

The Sultanate began measures last year to reform its finances, including the application of a value-added tax and the decision to work with the International Monetary Fund to develop a debt strategy.

Oman, a relatively small oil producer, is more sensitive to oil price fluctuations compared to its neighbors in the hydrocarbon-rich Gulf region, and its production of oil and condensate last year reached 348 million barrels, which means that it was particularly affected by the price collapse in 2020 and the Corona pandemic. .