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General view of Old Muscat the day after the burial of Sultan of Oman Qaboos bin Said in Muscat, Oman, January 12, 2020. REUTERS / Christopher Pike / File Photo

DUBAI, Oct. 2 (Reuters) – S&P Global Ratings said on Saturday it had revised its outlook for Oman from stable to positive amid rising oil prices and budget reform plans that are expected to cut government deficits and slow rising debt levels over the next three years.

The rating agency confirmed Oman’s long and short-term sovereign credit ratings in foreign and local currencies.

Oman, a relatively small oil producer, is more sensitive than its hydrocarbon-rich neighbors in the Gulf to fluctuations in oil prices, which means it has been particularly affected by the 2020 price drop and the COVID-pandemic. 19.

“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 ease,” S&P said in a statement.

He expects the budget deficit to decline to 4.2% of gross domestic product this year, from 15.3% of GDP in 2020.

But lower oil prices from 2023 would lead to a deterioration in the fiscal path despite planned reforms, he said, adding that total financing needs – budget deficit plus maturing debt – would remain high, around on average 12% of GDP until 2024.

Oman’s debt as a percentage of GDP reached nearly 80% last year, after just over 5% in 2015. The International Monetary Fund estimated last month that total public debt is expected to drop to 70% this year. year.

The sultanate took steps last year to put its finances in order, including the introduction of a value-added tax and the decision to work with the IMF to develop a debt strategy.

Reporting by Ghaida Ghantous; Editing by Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.

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Julio V. Miller

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