Oman’s economic environment and investment landscape have been experiencing positive impacts from Vision 2040, with efforts to reduce public sector debt and strengthen government finances. S&P Global Ratings has upgraded Oman’s long-term foreign and local currency sovereign credit ratings to ‘BBB-‘ from ‘BB+’, marking the second upgrade in 2024. The agency also assigned a stable outlook for Oman’s economic stability, noting the potential benefits of fiscal and economic reform initiatives implemented by His Majesty Sultan Haitham bin Tarik Al Said’s government. These reforms include the introduction of VAT, subsidy reforms, and a comprehensive fiscal stability program launched in October 2022.
Ibtisam Al Farooji, Undersecretary of Investment Promotion at the Ministry of Commerce, Industry & Investment Promotion, expressed optimism about the upgrade, stating that it showcases Oman’s dynamic investment landscape and economic environment. She highlighted the country’s regional connectivity within the GCC and emphasized the opportunities for international businesses to invest, set up operations, and grow in Oman. The IMF has also predicted that Oman will have the highest economic growth rate in the Arab World in 2024, reinforcing the country’s attractiveness for foreign direct investment. Al Farooji mentioned the importance of investing in key sectors such as manufacturing, logistics, renewables, fisheries, and mining, which can generate quality job opportunities for young talent and support Oman’s SMEs and entrepreneurial community.
S&P forecasts Oman’s real GDP to grow by about 2% per year on average from 2024 to 2027, with the government expected to post fiscal surpluses of 1.9% of GDP over the same period. The agency highlighted the government’s plans to reduce its role in the economy by transitioning from an owner to a regulator, which is projected to enhance the private sector and attract more foreign investment. In the first quarter of 2024, Oman witnessed a significant increase in foreign investment across key sectors compared to the previous year. Manufacturing saw a surge of 37.3%, while construction, transport, and hospitality also experienced growth. Oman attracted increased investment from key international markets, including the US, UK, Kuwait, and the Netherlands, further solidifying its position as an attractive business destination.
The positive data reflects growing global confidence in Oman’s economic reforms and investment opportunities, positioning the country as an enticing business destination. The upgrade in Oman’s credit rating by S&P demonstrates the success of the government’s fiscal and economic reform initiatives, as well as the ongoing efforts to diversify the economy and attract foreign investors. With a stable outlook for Oman’s economic stability, the country is poised for continued growth and development in key sectors such as manufacturing, logistics, renewables, fisheries, and mining. Investment in these sectors is expected to generate long-term job opportunities, support SMEs and entrepreneurs, and drive economic growth in the country.
