StartMuscat, Oman - 29 September, 2024: Highlighting the ongoing impacts of Vision 2040 on Oman’s economic environment and investment landscape along with the strenuous efforts made to reduce public sector debt and strengthen government finances, S&P Global Ratings has once again upgraded Oman’s long-term foreign and local currency sovereign credit ratings to 'BBB-' from 'BB+'. This is the second upgrade made to Oman’s credit rating in 2024.
The renowned financial information and analytics agency has further assigned a stable outlook for Oman’s economic stability. S&P noted in its report that this assessment balanced the potential benefits of the fiscal and economic reform program of His Majesty’s Government, including the introduction of VAT, subsidy reforms and a comprehensive fiscal stability program launched in October 2022 as well as the continued diversification of the economy, against the economy’s structural susceptibility to adverse oil price shocks.
Commenting on the positive development, Her Excellency Ibtisam Al Farooji, Undersecretary, Investment Promotion, Ministry of Commerce, Industry & Investment Promotion said: “S&P’s upgrade is a strong endorsement of Oman’s dynamic investment landscape and economic environment. It sends a clear message to the international business community that Oman is a better place than ever to invest, to set up a business and grow, to take advantage of our regional connectivity and integration across the GCC. The strength of Oman’s competitive offer was also amplified by the IMF predicting we will have the highest economic growth rate in the Arab World in 2024 and last year’s rating of Oman as the fourth most attractive country for foreign direct investment in the FDI Standouts Watchlist 2023.”
She added: “Of course the most important result of investment in our key sectors of manufacturing, logistics, renewables, fisheries, logistics and mining is the generation of quality long-term job and career opportunities for our ambitious young talent. Significant too is the creation of in-country value and ensuing possibilities for Oman’s SMEs and entrepreneurial community.”
S&P forecasts Oman’s real GDP will expand about 2% per year on average over 2024-2027 and the government will post fiscal surpluses of 1.9% of GDP over the same period. The S&P report also highlighted the government’s plans to continue reducing its role in the economy by transitioning from an owner to a regulator, a move expected to further develop the private sector and attract foreign investment.
In the first quarter of 2024, Oman saw a notable rise in foreign investment across key sectors compared to Q1 2023. Investment in manufacturing surged by 37.3%, while construction rose by 12.3%, transport by 5.1% and hospitality up 3.1%. Additionally, Oman attracted increased investment from several key international markets, with the US up by 41.4%, UK up 24.3%, Kuwait by 39.6% and the Netherlands by 26.7%.
“This positive data clearly reflects growing global confidence in Oman’s economic reforms and investment opportunities, further solidifying our position as an exciting business destination,” concluded Al Farooji.