(Reuters) - S&P Global Ratings on Friday upgraded Oman's credit ratings, stating favourable oil sector dynamics coupled with higher non-hydrocarbon sector output to sustain real economic growth over 2023-2026.
S&P raised its long-term foreign and local currency sovereign credit ratings on Oman to "BB+" from "BB". It also upgraded its transfer and convertibility assessment to "BBB-" for the country.
Oman, a relatively small oil producer, is more sensitive than its hydrocarbon-rich Gulf neighbours to oil price swings.
"The upgrade reflects the improved resilience of the Omani economy to external shocks on the back of continued supportive oil sector prospects along with sovereign balance sheet deleveraging and broader structural reforms," S&P said in a statement.
The ratings agency now expects the country's GDP growth to average about 2% over 2023-2026 after a year of slowdown due to voluntary oil production cuts.
Government debt is expected to fall to 38% of GDP in 2023 from about 40% in 2022, S&P said.
Increased revenue on the back of high oil prices last year helped Oman post a budget surplus of 1.144 billion rials ($2.97 billion), and repay 1.1 billion rials in loans in the first quarter of this year.
Oman's GDP in the first half of the year reached almost 17 billion rials, the state news agency reported on Monday, citing a senior official at the ministry of economy, up from almost 16.7 billion rials in the same period a year ago.
Earlier this week, Fitch Ratings also upgraded the country's credit ratings to "BB+" on improved finances.