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Oman’s improved credit rating reflection of robust economic policies

13 Apr 2024 Oman’s improved credit rating reflection of robust economic policies By

Muscat – Oman’s credit rating has shown significant improvement, a testament to the government’s effective measures to enhance public financial management and diversify economic revenue streams beyond oil. This development has been acknowledged by various international credit rating agencies, including S&P Global, which recently revised its outlook on Oman to ‘positive’ from ‘stable’.

At the same time, the rating agency affirmed its ‘BB+/B’ long- and short-term foreign and local currency sovereign credit ratings on the sultanate.

Mohammed bin Abu Bakr al Ghassani, Chairman of Board of Directors of Development Bank, attributed this positive shift to concerted efforts by the government to optimise public expenditure and maximise financial revenues, alongside a strategic reduction of public debt, particularly those with higher costs. “The upgrade in our credit rating is a direct result of the effective financial and economic policies implemented as part of our financial sustainability programme to address sudden economic challenges and bolster economic growth.”

Ghassani emphasised that the enhanced credit rating is a crucial indicator of the growing confidence among investors and lenders in Oman’s economy and banking sector. This improvement paves the way for Oman to secure loans at more favourable rates in the future and attract foreign investors to engage in diversified investments with substantial capital. Such developments are expected to accelerate the pace of Oman’s economic diversification plans outlined in Oman Vision 2040 and reinforce state and financial governance.

Economist Dr Yousef bin Ha-mad al Balushi highlighted the significant positive impacts of the improved credit rating, particularly in terms of securing cost-effective financing for both government and commercial banks in Oman. “This enhancement in credit terms substantially aids in channeling capital into Oman’s economy, gearing up for further economic activities in the future.”

Balushi further noted that both local and international investors regard credit rating as a vital metric for investment decisions.

The ongoing improvement can be attributed to several factors including stability of oil prices, the government’s fiscal policies, and growth in foreign exchange reserves.

Dr Khalid bin Saeed al Ameri, Chairman of Board of Directors of Oman Economic Association, also commented on the positive developments, noting that the elevation in Oman’s credit outlook from stable to positive by S&P confirms the effectiveness of the nation’s economic and financial strategies. These strategies align with national priorities and the objectives of the 10th Five-Year Plan, underscoring the strategic directions of the 2040 vision.

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