Oman’s credit rating raised to investment grade

Moody’s has upgraded the Sultanate of Oman’s credit rating from “Ba1” to “Baa3” and changed the outlook to stable. The decision reflects improved public debt indicators, the strength of the state’s financial position, and the efficiency of fiscal management, which has enhanced the Government’s ability to absorb shocks—particularly amid lower average oil prices and production levels.

In its report, the agency notes that Government efforts have yielded positive results, including measures to improve public spending efficiency. Government expenditure dropped to 29% of GDP, compared to an average of over 41% during 2016–2020. Public debt also fell from 37.5% of GDP at the end of 2023 to 35.5% by the end of 2024. Moody’s expects this downward trend to continue in the coming years. The cost of debt as a percentage of total revenues also improved, at 7.2%, down from about 9% in 2021.

The report adds that the average fiscal breakeven oil price declined to under USD 70 per barrel for 2024–2025, compared to USD 84 per barrel during 2016–2020.

Moody’s also highlights that Oman recorded real GDP growth of 1.7% in 2024. Inflation stood at 0.7%, with the state budget registering a surplus of 2.8%, and the current account balance riding to 2.1% of GDP.

According to the report, Oman’s efforts to diversify sources of income will support long-term fiscal stability. These efforts include increasing the contribution of non-oil revenues to the state budget, advancing plans to develop the green hydrogen sector and its associated industries, and expanding liquefied natural gas production by 2030.

Moody’s says that Oman’s credit rating could see further improvement as the country continues to strengthen its resilience to oil price volatility, accelerates the growth of the non-oil sector, and reduces the non-oil primary deficit.