Moody’s Investors Service downgraded the long-term issuer and senior unsecured bond ratings of the Oman government by a notch to Baa3, citing larger fiscal deficits and the ongoing weakening of its economy on the back of subdued growth in the coming years, ONA reported. “The key driver of the downgrade is Moody’s expectation that Oman’s fiscal and external metrics will continue to weaken, in part reflecting institutional and policy constraints,” Moody’s said in a statement on Saturday. “In the absence of significant measures to narrow the fiscal and current account deficits beyond the current plans, Oman’s capacity to absorb potential shocks would erode further.” Moody’s forecasts Oman’s fiscal deficit will remain at 5-7% of GDP in the next five years. The agency projects the government’s debt burden will exceed 50% of GDP by 2019 and rise above 60% by 2021, up from 40.5% at end-2017. The affordability of government debt will also weaken, with interest payments absorbing 8.4% of government revenues by 2019 compared with around 3.8% in 2017.
