Mubasher: Capital Intelligence (CI) announced lowering Oman’s long-term foreign currency (LTFC) rating to “BBB-” from “BBB”.
The international credit rating agency also revised Oman’s outlook to “stable” from “negative”, it said in a statement.
Meanwhile, the sovereign's short-term foreign currency (STFC) and short-term local currency (STLC) ratings were affirmed at “A3” with a “stable” outlook.
CI ascribed the downgraded credit rating to a large deficit in the Omani government's budget and current account.
The GCC nation’s fiscal consolidation measures were seen as insufficient for halting the deterioration in public finance metrics, CI added, noting that “the projected weakening in public and external debt metrics over the forecast horizon is consistent with a 'BBB-' rating.”
In addition, potential aid from other GCC countries, geopolitical risks, and economic reliance on hydrocarbon export revenues were also taken into account, the international credit rating agency indicated.
Since the summer of 2014, the steep drop in oil and gas prices has weighed on Oman’s fiscal and external accounts.
CI forecast Oman’s government debt to jump to 64.7% of gross domestic product (GDP) in 2020 from 47.1% in 2018 and total external debt to surge by 10% of GDP by 2020.
