Muscat – Oman’s Ministry of Finance on Monday reported a significant reduction in the sultanate’s outstanding public debt during the first quarter of this year. The country’s total public debt decreased to RO15.1bn by the end of Q1 2024 compared to RO15.3bn recorded by the end of 2023.

According to the monthly Fiscal Performance Bulletin released by the ministry, the government repaid several outstanding financial obligations during the first quarter of this year, leading to a decline of RO188mn in total public debt.

In recent years, Oman has successfully reduced its public debt to minimise risks associated with its debt portfolio by implementing various measures and initiatives to rationalise public spending and increase non-hydrocarbon revenue. This was achieved by utilising part of the additional revenue for liability management through: buy-back of some sovereign bonds for less than their nominal value; replacement of high-cost loans with low-cost loans; and issuance of sukuk and domestic bonds in the Muscat Stock Exchange at preferable rates.

Oman’s public debt had increased to 29.1% of GDP in 2016, from 4.9% in 2014, and peaked at 67.9% during the Covid-19 pandemic in 2020. Oman managed to reduce its debt-to-GDP ratio to 36.5% by the end of 2023.

As the government continues its efforts to reduce public debt by utilising additional revenue, the Ministry of Finance estimates the debt-to-GDP ratio will further decline to 35% in 2024.

In August last year, the Ministry of Finance estimated that Oman’s safe debt limit is at 30% of GDP, allowing the government to meet debt obligations and sustain economic growth.

Credit rating agencies have praised the government’s efforts in managing financial obligations and reducing public debt, the Ministry of Finance noted in its monthly bulletin.

The ministry stated that it is fully committed to developing financial plans that will enhance fiscal performance, strengthen Oman’s financial position, accelerate inclusive development, and stimulate economic activity. Therefore, reducing public debt and strengthening Oman’s financial position are priorities for the ministry, consistent with the objectives of Oman Vision 2040.