Moody’s raises Oman ratings

Moody's Investors Service said it upgraded Oman's long-term issuer and long-term senior unsecured ratings to Ba1 from Ba2 and changed the outlook to stable from positive. The agency also lifted Oman's senior unsecured medium-term note program rating to (P)Ba1 from (P)Ba2.

“The upgrade reflects Moody's expectation that the further improvements in Oman's debt burden and debt affordability metrics during 2023 will last, as the government's actions amplify the oil prices windfall gains through spending restraint and prioritization of debt repayment.

“A lower debt burden increases the sovereign's resilience to potential future shocks, and the improving track record of fiscal prudence and policy effectiveness increases the likelihood that the stronger debt burden and debt affordability metrics will be maintained in the next few years even if oil prices become less supportive,” Moody’s said in a press release.

The revised outlook reflects the balance of risks at the Ba1 rating level. Oman's still heavy economic and fiscal reliance on oil and gas exposes it to a potentially large and protracted erosion in its fiscal and external accounts if there is a drop in global oil demand and prices, the agency explained.

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