Muscat – Helped by higher oil revenues and successful implementation of fiscal reforms, Oman’s government managed to reduce total pubic debt by RO2.2bn by the end of July this year.

The sultanate’s total public debt dropped to RO18.6bn as of the end of July 2022 from RO20.8bn in the end of 2021, according to the Fiscal Performance bulletin issued by the Ministry of Finance.

‘Oman’s liability management exercise reduced public debt by RO2.2bn as of end-July 2022. This was achieved through buy-back of some sovereign bonds for less than the nominal value, prepayment of high cost loans and issuance of government sukuk in the Muscat Stock Exchange at preferable rate,’ the ministry said.

Through its liability management exercise Oman achieved an RO127mn saving on debt servicing cost, enhanced investors confidence and improved the country’s credit ratings, the Ministry of Finance noted.

Earlier in July, S&P Global Ratings said that Oman’s recent liability management exercise will help reduce the government’s debt levels, generate interest cost savings, and smoothen its maturity profile.

S&P expects Oman’s gross government debt will fall to 48 per cent of GDP by year-end 2022, compared with 63 per cent in 2021 and a peak of 70 per cent in 2020.

Following several years of deteriorating public finances and external accounts until 2020, Oman is now benefiting from higher oil prices and fiscal and governance reforms.

The sultanate recorded a budget surplus of RO784mn in the first half of this year, helped by higher oil and gas revenues and increased tax collection. Total public income rose 54.2 per cent to RO6.724bn in the first six months of 2022 compared to RO4.361bn in the same period last year.

Oman’s government intends to largely allocate the fiscal surplus toward higher spending on development projects and reducing government debt.