Muscat – Fitch Ratings has upgraded Oman’s long-term foreign-currency issuer default rating from BB+ to BBB– with a stable outlook, elevating the sultanate into investment-grade territory. The agency said the decision reflects the sustained improvement in Oman’s public finances, stronger external buffers and continued confidence in the government’s prudent fiscal management amid fluctuating oil prices.

According to the report issued on Monday, Oman has demonstrated ‘solid fiscal discipline’, cutting public debt to about 36% of GDP in 2025, down sharply from nearly 68% in 2020.

Fitch expects the fiscal deficit to remain contained at around 1% of GDP in 2026–27, based on an assumed average Brent price of US$63 per barrel. The agency also estimates Oman’s fiscal breakeven oil price at approximately US$67 per barrel over the same period.

Economic performance is expected to strengthen, with GDP growth forecast at around 4% in 2025, compared to an estimated 1.6% in 2024. Fitch attributes this rebound to robust non-oil activity, projected to grow by about 3.8%, supported by rising domestic demand, steady foreign investment inflows and continued momentum in the tourism sector. The easing of OPEC+ production restrictions is also expected to lift oil-sector growth.

The report highlights a structural shift in Oman’s external position, noting that the country became a net external creditor in 2024, with net credit equivalent to 2% of GDP – a stark improvement from its net debtor position in 2021. This turnaround is credited to active debt repayments, lower liabilities of state-owned enterprises, increased foreign assets and a strengthening of official reserves.

Fitch indicated that future upgrades are possible if Oman further broadens its non-oil revenue base, enhances its resilience to oil-price volatility, continues reducing public debt and boosts foreign exchange reserves and sovereign wealth fund assets.

Oman has now secured investment grade ratings from all major global agencies. Standard & Poor’s Global Ratings (S&P) affirmed Oman’s credit rating at BBB- with a stable outlook last year, while Moody’s Investors Service upgraded the sultanate to investment grade (Baa3) in July 2025.

Fitch’s latest upgrade marks another significant milestone, underscoring the effectiveness of the sultanate’s economic and fiscal reforms and reinforcing investor confidence as the nation advances its Vision 2040 diversification agenda.