Standard & Poor’s Ratings Services, which affirmed Oman’s rating, said it was a reflective of a stable outlook balances Oman’s strong fiscal and external position–which provides a more-than-ample buffer to withstand external shocks–against risks from structural and institutional weaknesses, which could derail policymaking; a difficult demographic profile that could challenge economic policy; and limited monetary policy flexibility.
“We could consider lowering the ratings if the pace of economic growth, diversification, and structural reform is not sufficient to increase per capita real GDP growth to a pace comparable to peers. Downward pressure on the ratings could also build from a protracted weakening in fiscal performance, for example as a result of continued increases in spending on the public-sector wage bill, which could lead to an increase in government debt and a fast drawdown of government assets,” S&P in a statement said.
“We could consider an upgrade if the underpinnings of economic growth strengthen, raising per capita income levels and addressing social challenges, including unemployment,” S&P in a statement, added.