Standard Chartered Bank forecasts further upside for Oman’s credit rating
In its latest Global Focus report for Q2 2024, Standard Chartered Bank projects continued improvement in Oman’s credit rating, citing a series of consecutive upgrades in recent years.
'Currently rated BB+, up from B+ in 2021, Oman is poised to regain its investment-grade rating as a result of a continued reduction in its debt-to-gdp ratio, enhanced fiscal performance, and a commitment to medium-term reforms,' Standard Chartered said in a press statement on Tuesday.
Standard Chartered anticipates a further decline in Oman's public debt to 34% of GDP by the end of 2024, supported by sustained twin surpluses. External debt repayment is expected to amount to 5% of GDP in 2024, potentially covered by fiscal surplus proceeds or refinancing options.
As per the bank's estimates, Oman's inflation is forecasted to decelerate further from 1.0% in 2023, with growth in the non-oil sector (70% of real GDP) picking up to 2.5% in 2024, driven by
Oman’s steadfast reforms pave the way for an imminent return to investment-grade rating, fueled by a robust economic trajectory and strong non-oil growth HUSSAIN AL-YAFAI
sectors such as tourism, manufacturing and trade.
The commitment to reforms underscores Oman’s mediumterm outlook, with structural changes aimed at improving the business environment, attracting foreign direct investment, and executing IPOS. Standard Chartered projects a policy rate of 5.5% by the end of 2024, consistent with its latest US Fed rate forecasts.
Hussain al-yafai, CEO of Standard Chartered Oman, said, "Oman's steadfast reforms pave the way for an imminent return to investment-grade rating, fueled by a robust economic trajectory and strong non-oil growth.”