S&P downgrades Oman to BB+/B

S&P said it lowered its long- and short-term ratings on Oman to BB+/B from BBB-/A-3.

The outlook is negative.

S&P said the downgrade reflects its view that the Omani government's heightened external financing needs resulted in the economy's large net external asset position (external assets exceeding external liabilities) declining to a level insufficient to mitigate the risk from its volatile export revenue base.

The agency estimates that Oman's net external asset position has materially declined to30% of current account receipts in 2017, from 60% in 2016. At the same time, it estimates that Oman's fiscal and current account deficits were higher in 2016 than anticipated, and GDP per capita lower.

Based on projections for continued sizable current account deficits, S&P said it expects Oman to be in a narrow net external debtor position of 12% in 2020.

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