RIYADH: In a new development signaling a shift in Oman’s economic landscape, global credit rating agency Standard & Poor has upgraded the nation’s long-term credit rating from “BB” to “BB+.” 

S&P Global’s assessment underscores a transformation in Oman’s non-oil sector, promising substantial growth in the years ahead, particularly between 2023 and 2026. This shift is expected to play a pivotal role in enhancing the country’s financial prosperity. 

Furthermore, government fiscal and economic momentum is set to continue until 2026, forecasting an average of 2 percent year-on-year growth in the country’s gross domestic product, according to the agency. 

“Oman’s economy depends on the oil sector, which accounts for about 30 percent of GDP, 60 percent of goods exports, and 70 percent of government fiscal receipts. This dependence weighs on our assessment of its fiscal and external resilience, and we reflect this in the rating,” the report stated. 

The agency predicts a deceleration in economic growth by 1 percent in 2023, mainly attributed to reductions in oil production.   

Nonetheless, the dip in oil output is anticipated to be counterbalanced by a surge in condensate and gas. 

In the non-hydrocarbon sector, Oman is projected to witness a 2 percent increase in 2023, with hydrocarbon manufacturing expected to rally in 2024 and 2025. 

Moreover, the banking sector witnessed a marked boost in credit balance, registering a growth of 5.3 percent in July 2023 compared to the same month the previous year. 

Data from the nation’s central bank indicates that credit extended to the private sector surged by 5.2 percent by the end of July 2023, totaling 20.2 billion Omani rials ($52.41 million). 

Highlighting another significant sector, Oman’s tourism industry is poised for expansion over the upcoming years. Its contribution to the GDP is projected to rise to 2.75 percent, up from 2.4 percent in 2023, according to Oman’s Minister of Heritage and Tourism. 

In a statement to Oman News Agency, Salim Al-Mahrouqi detailed that the tourism industry was responsible for 1.07 billion Omani rials of the comprehensive 1.9 billion Omani rials revenue in 2022.