(MENAFN- Muscat Daily) Capital Intelligence (CI) has affirmed Oman's long-term foreign currency and local currency ratings of A and its short-term foreign and local currency ratings at A1. The outlook remains at 'stable'.
According to the credit ratings agency the sultanate's current economic performance is relatively strong but downside risks have increased with the recent decline in international oil prices.
'The Omani economy expanded by circa 3.4 per cent in 2014 compared with around five per cent in 2013 supported by the continued growth of public and capital spending. The economy is expected to continue its steady growth averaging 3.5 per cent during 2015-16 driven by growth in the non-hydrocarbon sectors and supported by GCC-funded infrastructure projects.'
According to CI estimates the public finances are currently sound overall with government financial assets comfortably exceeding a gross government debt stock that amounted to a modest eight per cent of GDP in 2014. 'However the central government budget position has slightly deteriorated in tandem with the steep decline in oil prices and is expected to have posted a small deficit of around 0.4 per cent of GDP in 2014 compared to a surplus of one per cent of GDP in 2013. In the absence of any expenditure adjustment lower oil prices are likely to translate into budget deficits of increasing magnitude in the coming years with CI foreseeing deficits of about 5.8 per cent and 7.6 per cent of GDP in 2015 and 2016 respectively.'
Oman's external balance sheet is strong and international liquidity is currently high. The country's comfortable net external creditor position is the counterpart to a long run of current account surpluses which in turn are largely attributable to previous periods of high oil prices and the expansion of the liquefied natural gas (LNG) industry.
According to CI the current account surplus was around 9.5 per cent of GDP in 2014 while the combined foreign financial assets of the official and commercial banking sectors exceeded gross external debt by around 30 per cent of GDP at year-end.
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