Oman Cut to Junk

Oman was cut to junk by S&P Global Ratings, which said a drop in crude prices could hamper exports from the largest Arab oil producer outside OPEC and jeopardize its finances, Bloomberg reported. S&P lowered the Persian Gulf Arab state’s sovereign debt long-term rating to BB+, one level below investment grade, from BBB- and changed the outlook to negative, the New York-based firm said in a statement Friday. “The negative outlook reflects the potential for Oman’s income level to weaken and for its fiscal and external positions to deteriorate,” S&P said. The slump in oil prices since 2014 has put pressure on the finances of the sultanate, forcing it to join other (Persian) Gulf Arab countries (Saudi Arabia, Kuwait, the UAE, Qatar and Bahrain) in tapping international debt markets to plug budget shortfalls. S&P estimates Oman’s net external asset position has fallen to 30% of current account receipts in 2017 from 60% last year. The country will post a budget deficit of 10.3% of gross domestic product in 2017, according to the median estimate of eight economists on Bloomberg.