Fitch downgrades Oman

Fitch Ratings said it downgraded Oman's long-term foreign currency issuer default rating to BB+ from BBB- with a stable outlook.

The downgrade reflects that despite a sharp increase in average oil prices this year, the agency expects Oman's budget deficit to narrow only gradually to 9% of GDP, still one of the largest deficits among Fitch-rated sovereigns, the agency said.

This has exposed the rigidity of public expenditure and weaknesses in Oman's fiscal policy framework, Fitch noted.

The agency said it estimates that Oman's underlying fiscal stance has become more expansionary in 2018, as measured by a widening of the non-oil primary deficit.

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