Muscat – S&P Global Ratings has affirmed Oman’s long-term sovereign credit rating at ‘BBB-’ and short-term rating at ‘A-3’, with a stable outlook, while sharply raising its forecast for the sultanate’s economic growth this year.

S&P now expects Oman’s real GDP to grow by 3.5% in 2026, up sharply from its previous forecast of 1.6% and compared to 2.3% growth in 2025.

The ratings agency said Oman’s fiscal and external positions are strengthening, supported by improved terms of trade, while the country’s accumulated financial buffers provide resilience against adverse geopolitical developments.

‘The stable outlook reflects our opinion that Oman’s fiscal and external buffers will support the sovereign against adverse geopolitical developments,’ S&P said, adding that Oman will remain resilient to regional geopolitical conflicts.

The agency noted that Oman has liquid government assets in excess of 40% of GDP and gross foreign currency reserves of close to 20% of GDP, providing significant buffers.

The ratings agency expects the government to deliver a fiscal surplus of 4.8% of GDP in 2026, compared to its previous forecast of a minor deficit of 0.7% of GDP. It also expects gross government debt to stabilise at just below 30% of GDP by 2029, down from about 32% in 2025 and a post-pandemic high of 68%.

S&P highlighted Oman’s progress in addressing structural economic challenges, including public finance reforms, stronger governance and increased transparency.

It said the country’s reform agenda continues to support the development objectives of Vision 2040, while the 11th Five-Year Plan for 2026-2030 is expected to focus on deepening capital markets and strengthening financial-sector regulation.

The stable outlook, however, reflects continued geopolitical uncertainty, with S&P’s base-case scenario assuming regional disruptions will persist into 2027.