© Reuters. FILE PHOTO: General view of previous Muscat the day after Oman’s Sultan Qaboos bin Said was laid to relaxation in Muscat, Oman, January 12, 2020. REUTERS/Christopher Pike/File Photo
DUBAI (Reuters) – S&P Global (NYSE:) Ratings stated on Saturday it had revised its outlook on Oman to positive from secure due to higher oil costs and monetary reform plans which might be anticipated to slim state deficits and sluggish an increase in debt ranges over the subsequent three years.
The scores company affirmed Oman’s ‘B+/B’ long- and short-term international and native forex sovereign credit score scores.
Oman, a comparatively small oil producer, is extra delicate than its hydrocarbon-rich Gulf neighbours to oil value swings, that means it was hit particularly arduous by 2020’s value crash and the COVID-19 pandemic.
“Economic and fiscal pressures on Oman are easing, as the effects of the sharp drop in oil prices in 2020 and the COVID-19 pandemic abate,” S&P stated in a press release.
It anticipated the fiscal deficit to lower to 4.2% of gross home product this yr from 15.3% of GDP in 2020.
But decrease oil costs from 2023 would lead to a worsening fiscal trajectory regardless of deliberate reforms, it stated, including that whole funding wants — fiscal deficit plus maturing debt — would stay excessive, averaging about 12% of GDP by 2024.
Oman’s debt as share of GDP hit almost 80% final yr having been little greater than 5% in 2015. The International Monetary Fund final month estimated that whole authorities debt is anticipated to drop to 70% this yr.
The sultanate has begun measures prior to now yr to repair its funds, together with the introduction of a value-added tax and the choice to work with the IMF to develop a debt technique.
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