Moody’s Upgrades Oman’s Credit Rating Due to Better Financial Health
Moody’s Ratings has raised Oman’s credit rating from Ba1 to Baa3 and changed its outlook from positive to stable. This upgrade is because Oman has improved its debt situation and is better prepared to handle low oil prices.
Stronger Economy
Moody’s said Oman has made good progress in cutting down its debt and keeping government spending under control. These steps help Oman deal better with any future drop in oil demand or prices.
By the end of 2024, Oman’s government debt dropped to 35.5% of its GDP, down from 37.5% in 2023. Moody’s said the country’s financial health has been getting better since 2020 and will likely keep improving, though at a slower pace than before.
Even if oil prices drop below expected levels, Oman’s financial position should still match the Baa3 rating, Moody’s added. The improved financial condition gives the government more time to make long-term changes to reduce its dependence on oil.
However, Moody’s warned that Oman’s economy still depends heavily on oil. A faster global shift to clean energy could hurt Oman’s income from oil.
Personal Income Tax
Oman plans to start a 5% personal income tax in 2028, becoming the first Gulf country to do so. The tax will affect about 1% of the population and could help the country earn money from other sources besides oil.
Economic Growth
Oman’s economy grew by 2.5% in the first quarter of 2025, reaching $24.6 billion. Most of this growth came from non-oil businesses, which grew by 4.4%, reaching $18 billion.
The oil sector, however, saw a small drop in earnings—down 0.4% to $7.6 billion, compared to $7.7 billion in the same period last year.
Published: 14th July 2025
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