Fitch Ratings on Monday upgraded Oman’s issuer default rating (IDR) to "BB", with stable outlook, from "BB-", after improvements in key fiscal figures resulting in lesser external financing pressures and a sharp fall in government debt.
The "BB" rating is two notches below investment grade.
“Higher oil revenue will underpin budget surpluses in 2022 and 2023 and a sharp fall in government debt / gross domestic product to below the 'BB' median,” Fitch said in a statement on Monday.
While the rating agency expects oil prices to decline over the medium term and some dilution of fiscal reform in 2022, it forecasts that Oman’s commitment to fiscal consolidation through the state's medium-term fiscal plan will be sufficient to limit renewed deterioration in public and external-finance figures.
Oman’s budget surpluses are forecast at 5.5 per cent and 3.4 per cent of GDP in 2022 and 2023, respectively, its first surpluses since 2013, as oil revenue growth easily outweighs additional spending.
The rating agency said it "assumes average Brent prices of $105 a barrel in 2022 and $85 a barrel in 2023", and expects crude and condensate output to grow by 8.8 per cent in 2022 and 3.5 per cent in 2023.
For 2024, Fitch forecast a small budget deficit as lower oil prices (assumed to average $65 a barrel) and modest GDP growth offset gains from continuing fiscal reforms that will boost non-oil revenue and lower overall spending.
For the current year, the rating agency forecasts spending to be higher than budgeted, due to fuel subsidies to cushion the domestic effects of high energy prices, slower reform of other subsidies and higher capex.
The rating agency expects the government debt to GDP ratio to fall to 46.7 per cent in 2022 and 44.9 per cent in 2023, from about 70 per cent in 2020, supported by better budget performance and oil-fuelled nominal GDP growth in 2022.
"Oman used part of the oil revenue windfall to buy back $0.7 billion of bonds maturing across 2025-2032; pre-pay the remainder of the $1.3bn pre-export financing facility taken out in 2017 and repay a maturing $3.6bn loan from China," Fitch said.
“This [pre-payment of debt] has created some interest savings and the latter two payments have reduced the amount of variable-rate debt Oman holds and streamlined its debt portfolio.”
The rating agency estimates Oman’s net foreign borrowing in 2022 be negative to about 4 per cent of GDP.
External financing pressures on Oman have eased this year as the government has fulfilled its external financing requirement for 2022 and has reduced the size of maturities in 2023 to $1.7bn.
“Oman's funding position is considerably more comfortable relative to recent years', although medium-term funding requirements remain sizeable and the country's level of external indebtedness is high,” Fitch said.
Sovereign net foreign assets are expected to turn marginally positive in 2022, after deteriorating dramatically to minus 9 per cent of GDP in 2020 from 53 per cent in 2014.
Fitch expects the Central Bank of Oman's gross foreign reserves to strengthen in 2022-2023 on the back of current-account surpluses and average above four and a half months of current external payments.
Oman’s BB IDR rating is supported by an estimated real GDP growth of 4.4 per cent in 2022 from 3 per cent in 2021, driven largely by the oil sector, Fitch said.
Non-oil GDP growth is expected to strengthen mildly, to about 3 per cent, after loosening pandemic-related restrictions, renewed population growth and a mild loosening of fiscal policy.
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
Five hymns the crowds can join in
Papal Mass will begin at 10.30am at the Zayed Sports City Stadium on Tuesday
Some 17 hymns will be sung by a 120-strong UAE choir
Five hymns will be rehearsed with crowds on Tuesday morning before the Pope arrives at stadium
‘Christ be our Light’ as the entrance song
‘All that I am’ for the offertory or during the symbolic offering of gifts at the altar
‘Make me a Channel of your Peace’ and ‘Soul of my Saviour’ for the communion
‘Tell out my Soul’ as the final hymn after the blessings from the Pope
The choir will also sing the hymn ‘Legions of Heaven’ in Arabic as ‘Assakiroo Sama’
There are 15 Arabic speakers from Syria, Lebanon and Jordan in the choir that comprises residents from the Philippines, India, France, Italy, America, Netherlands, Armenia and Indonesia
The choir will be accompanied by a brass ensemble and an organ
They will practice for the first time at the stadium on the eve of the public mass on Monday evening
Take Me Apart
Kelela
(Warp)
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Global state-owned investor ranking by size
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United States
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China
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3.
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UAE
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4.
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Japan
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5
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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MATCH INFO
Manchester United 1 (Fernandes pen 2') Tottenham Hotspur 6 (Ndombele 4', Son 7' & 37' Kane (30' & pen 79, Aurier 51')
Man of the match Son Heung-min (Tottenham)
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
RESULTS
6pm: Al Maktoum Challenge Round-2 – Group 1 (PA) $55,000 (Dirt) 1,900m
Winner: Rajeh, Antonio Fresu (jockey), Musabah Al Muhairi (trainer)
6.35pm: Oud Metha Stakes – Rated Conditions (TB) $60,000 (D) 1,200m
Winner: Get Back Goldie, William Buick, Doug O’Neill
7.10pm: Jumeirah Classic – Listed (TB) $150,000 (Turf) 1,600m
Winner: Sovereign Prince, James Doyle, Charlie Appleby
7.45pm: Firebreak Stakes – Group 3 (TB) $150,000 (D) 1,600m
Winner: Hypothetical, Mickael Barzalona, Salem bin Ghadayer
8.20pm: Al Maktoum Challenge Round-2 – Group 2 (TB) $350,000 (D) 1,900m
Winner: Hot Rod Charlie, William Buick, Doug O’Neill
8.55pm: Al Bastakiya Trial – Conditions (TB) $60,000 (D) 1,900m
Winner: Withering, Adrie de Vries, Fawzi Nass
9.30pm: Balanchine – Group 2 (TB) $180,000 (T) 1,800m
Winner: Creative Flair, William Buick, Charlie Appleby
FIGHT CARD
Bantamweight Hamza Bougamza (MAR) v Jalal Al Daaja (JOR)
Catchweight 67kg Mohamed El Mesbahi (MAR) v Fouad Mesdari (ALG)
Lighweight Abdullah Mohammed Ali (UAE) v Abdelhak Amhidra (MAR)
Catchweight 73kg Mostafa Ibrahim Radi (PAL) v Yazid Chouchane (ALG)
Middleweight Yousri Belgaroui (TUN) v Badreddine Diani (MAR)
Catchweight 78kg Rashed Dawood (UAE) v Adnan Bushashy (ALG)
Middleweight Sallaheddine Dekhissi (MAR) v Abdel Emam (EGY)
Catchweight 65kg Rachid Hazoume (MAR) v Yanis Ghemmouri (ALG)
Lighweight Mohammed Yahya (UAE) v Azouz Anwar (EGY)
Catchweight 79kg Omar Hussein (PAL) v Souhil Tahiri (ALG)
Middleweight Tarek Suleiman (SYR) v Laid Zerhouni (ALG)
Brief scores:
Manchester City 3
Bernardo Silva 16', Sterling 57', Gundogan 79'
Bournemouth 1
Wilson 44'
Man of the match: Leroy Sane (Manchester City)
