- S&P upgrades Oman’s outlook to positive, citing improving fiscal position and macroeconomic fundamentals, affirming ‘BB+/B’ rating.
- Oman implements visa-free entry for 103 countries, signaling efforts to attract tourists and investors, despite facing a projected budget deficit for 2024.
- Oman’s Vision 2040 aims to significantly reduce oil sector dependency, with strategic reforms projected to strengthen the government’s balance sheet and accelerate economic growth, as per S&P’s optimistic forecasts.
S&P, the credit ratings agency, has upgraded Oman’s outlook to positive from stable, citing the country’s improving fiscal position. The agency also affirmed Oman’s rating at ‘BB+/B’. Oman is expected to see its real GDP grow by an average of 2 per cent annually during the period from 2024 to 2027.
In line with its efforts to strengthen its economy, Oman has put 103 countries on its visa-free list, aiming to attract more tourists and investors. In January, Oman projected a budget deficit of 640 million rials ($1.66bn) for 2024, contrasting with a surplus in 2023 due to lower oil production and prices impacting public finances.
Despite facing a budget deficit of 640 million rials ($1.66bn) for 2024, Oman is actively diversifying its sources of income and economic sectors away from hydrocarbons. However, the country still relies heavily on oil revenue, similar to its oil and gas exporting neighbors.
The revision in Oman’s outlook reflects confidence in its fiscal policies and efforts to reduce dependency on oil. It signifies a positive trajectory for the country’s economic growth and stability. With strategic initiatives in place to attract investment and boost tourism, Oman is poised to navigate challenges and capitalize on opportunities for sustainable development in the years ahead.
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Oman’s Vision 2040, a strategic economic plan launched in 2021, aims to reduce the oil sector’s contribution to gross domestic product (GDP) to 16% by 2030 and further to 8.4% by 2040, down from 39% in 2017. S&P, in a statement, noted that the government’s balance sheet would strengthen as a result of the economic reform program, potentially leading to accelerated deleveraging in many state-owned enterprises without impeding economic growth.
The rating agency anticipates Oman’s real GDP to grow by an average of 2% per year during the period from 2024 to 2027. This positive outlook reflects confidence in Oman’s improving macroeconomic fundamentals.
In September 2023, S&P upgraded Oman’s credit rating to ‘BB+’, citing stronger macroeconomic fundamentals. This upgrade underscores growing investor confidence in Oman’s economic trajectory and its commitment to reform and diversification.
Oman’s strategic plan aligns with global trends towards reducing dependence on oil revenues and fostering economic diversification. This forward-looking approach positions Oman for sustainable growth and resilience in the face of evolving economic challenges.
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Last Updated on March 30, 2024 by Safiya K
