Muscat: Fitch Ratings has upgraded Oman’s credit rating to “BB” with a stable outlook. The upgrade reflects the significant improvements in Oman’s fiscal and economic metrics, lower external financing pressures highlighting the Government’s continued commitments and fiscal control towards reforms as per the Medium Term Fiscal Plan, as well as higher oil prices.

In its report, Fitch forecasts a budget surplus in 2022 and 2023 of 5.5% and 3.4% of GDP, respectively, which is the first surplus recorded since 2013. Further, Fitch estimates a rise in real GDP to 4.4% in 2022 from 3% in 2021 and 2.8% in 2023.

Fitch projects a decline in Government debt to GDP in 2022 to 46.7% and 44.9% in 2023. Additionally, the State-Owned Enterprises (SOE) debt to GDP is expected to decline in 2022.

Furthermore, it has stated that Oman has successfully fulfilled its 2022 funding requirements and reduced 2023 external maturities to USD 1.7 billion as part of its liability management.

Fitch expects a positive Sovereign Net Foreign Assets position in 2022. The gross foreign reserves of the Central Bank of Oman (CBO) are estimated to strengthen in 2022-2023 due to Current Account Surpluses.

It is worth noting that S&P Global Ratings has upgraded Oman’s credit rating to “BB-” with a stable outlook in April 2022. Additionally, Moody’s in October 2021 has revised its outlook from negative to stable.