Fitch Ratings has upgraded Oman’s economy to investment-grade status, raising its long-term foreign-currency rating from BB+ to BBB-, while citing factors like the Sultanate’s stronger public finances, improved external position, and continued commitment to prudent fiscal management.
The agency noted that the Gulf nation has successfully strengthened fiscal discipline, apart from reducing government debt significantly to around 36% of GDP in 2025, down from about 68% in 2020, reported the Oman News Agency (ONA).
While the outlook remains stable, Fitch Ratings expects the budget deficit to stay at a safe level of approximately 1% of GDP in 2026–2027, assuming an average Brent crude price of USD 63 per barrel, while the fiscal breakeven oil price has been estimated at around USD 67 per barrel for the same period. The upgrade reflects the Sultanate’s sustained fiscal and external recovery since 2020, underpinned by sharp debt reduction, disciplined budgeting, and stronger external buffers.
Government debt has also fallen to around 36% of GDP from nearly 68% five years ago, while the Sultanate has turned into a net external creditor for the first time in years, Fitch Ratings noted.
The agency further added that the rating also factors in steady non-oil growth, rising foreign investment, and reforms aimed at widening the tax base, even as it cautioned that Oman’s heavy reliance on hydrocarbons and state-owned enterprise leverage continue to remain key structural risks.
“Domestic consumption, robust foreign investment and tourism will maintain non-oil growth above 3.5% in 2026 and 2027,” the rating agency commented, while adding that the GDP will grow by around 4% in 2025, up from a 1.6% expansion in 2024, supported by strong 3.8% non-oil sector growth. Domestic spending, continued foreign direct investment (FDI) inflows and expanding tourism will be the consistent growth engines over 2026-27.
The report also underscored a major turnaround in Oman’s external finances, with the Gulf country becoming a net external creditor in 2024, equivalent to 2% of GDP, compared with its net debtor position in 2021. This improvement happened due to government debt repayments, reduced liabilities at state-owned firms, stronger foreign assets, and higher reserves.
“Fitch Ratings emphasised that Oman’s rating could be upgraded further if the government strengthens its resilience to oil price volatility by broadening non-oil revenues, sustaining fiscal gains through continued debt reduction, and bolstering external reserves and sovereign wealth fund assets,” ONA concluded.