Monday 13, November 2017 by Jessica Combes

Sultanate of Oman long-term ratings lowered to BB on weaker external position


S&P Global Ratings lowered its long-term foreign and local currency sovereign credit ratings on the Sultanate of Oman to ‘BB’ from ‘BB+’.

The outlook is stable. The ratings agency affirmed itsshort-term ‘B’ foreign and local currency sovereign credit ratings on the sultanate.

The transfer and convertibility (T&C) assessment on Oman was also lowered to ‘BB+’from ‘BBB-’.

The stable outlook balances expectations that Oman’s fiscal and external deficits will shrink gradually over the period to 2020 against the risk of further deterioration of Oman’s economic wealth levels and debt servicing costs. S&P could lower the ratings on Oman if weaker economic growth were to result in its GDP per capita falling below current expectations, for example through a combination of lower real GDP growth or higher population growth weakening Oman’s wealth levels.

Raising the ratings on Oman would be considered if our forecasts for the sultanate’s fiscal and external positions substantially improve, perhaps due to a significant decline in government external debt accumulation or a sharp increase in usable foreign exchange reserves.