LONDON: The outlook for Oman’s banking sector was cut to negative by Moody’s Investors Service to reflect a reduction in the government’s ability to support the country’s banks, weaker economic growth and tightening liquidity.
“The Omani government has a reduced capacity to support banks in case of need, owing to fiscal deterioration,” said the credit ratings agency in a statement on Tuesday.
“We expect a softening in Oman’s operating environment, with fiscal consolidation amid prolonged oil price weakness weighing on economic growth,” said Mik Kabeya, analyst at Moody’s.
“This will weigh on credit growth, which we forecast to fall to five percent in 2017, down from 10.1 percent in 2016.”
The change from stable comes after Moody’s last month cut the rating of the sultanate to the second-lowest investment grade, saying its progress toward addressing structural vulnerabilities to a weak oil price environment has been more limited than expected.
A halving of crude prices since 2014 left Oman with a budget gap of almost 22 percent of economic output in 2016, according to the International Monetary Fund.
Slower economic growth will drive a marginal weakening in problem loans to around 3 percent of gross loans in 2017-18, from 2.1 percent at end-March 2017, according to the rating agency.
“Funding and liquidity conditions will remain tight, as high domestic government borrowing limits funds available to lend to the wider economy,” Moody’s added.
Nonetheless, the government’s international bond issuances, slower credit growth and higher oil prices will moderate the pressure.
Oman in August signed an agreement for $3.5 billion in loans from Chinese financial institutions and in May raised $2 billion through an Islamic bond sale, which lured orders for more than three times the issue size.
Moody’s cuts Oman banking outlook on weaker govt support, poor growth
Moody’s cuts Oman banking outlook on weaker govt support, poor growth
BYD Americas CEO hails Middle East as ‘homeland for innovation’
- In an interview on the sidelines of Davos, Stella Li highlighted the region’s openness to new technologies and opportunities for growth
DAVOS: BYD Americas CEO Stella Li described the Middle East as a “homeland for innovation” during an interview with Arab News on the sidelines of the World Economic Forum.
The executive of the Chinese electric vehicle giant highlighted the region’s openness to new technologies and opportunities for growth.
“The people (are) very open. And then from the government, from everybody there, they are open to enjoy the technology,” she said.
BYD has accelerated its expansion of battery electric vehicles and plug-in hybrids across the Middle East and North Africa region, with a strong focus on Gulf Cooperation Council countries like the UAE and Saudi Arabia.
GCC EV markets, led by the UAE and Saudi Arabia, rank among the world’s fastest-growing. Saudi Arabia’s Public Investment Fund has been aggressively investing in the EV sector, backing Lucid Motors, launching its brand Ceer, and supporting charging infrastructure development.
However, EVs still account for just over 1 percent of total car sales, as high costs, limited charging infrastructure, and extreme weather remain challenges.
In summer 2025, BYD announced it was aiming to triple its Saudi footprint following Tesla’s entry, targeting 5,000 EV sales and 10 showrooms by late 2026.
“We commit a lot of investment there (in the region),” Li noted, adding that the company is building a robust dealer network and introducing cutting-edge technology.
Discussing growth plans, she envisioned Saudi Arabia and the wider Middle East as a potential “dreamland” for innovation — what she described as a regional “Silicon Valley.”
Talking about the EV ambitions of the Saudi government, she said: “If they set up (a) target, they will make (it) happen. Then they need a technology company like us to support their … 2030 Vision.”
