The Sultanate’s coffers have been depleted by a slump in oil prices over the past few years and the country has increasingly relied on external borrowing to refill widening deficits.
Thursday 02, May 2019 BY KUDAKWASHE MUZORIWA
Oman is preparing a sale of its first US dollar-denominated bonds in 2019, as the government seeks to take advantage of improved conditions across emerging markets to finance its budget deficit.
In January, the government announced plans to cover 86 per cent of this year's expected budget deficit through local and foreign borrowing.
The Sultanate has raised debt internationally over the past few years to levels that have created concerns among investors and pushed its credit rating to junk status.
The International Monetary Fund estimated that Oman would need oil prices to be at $97 per barrel to balance its budget this year and the fund expected the country’s budget deficit of nearly 10 per cent, while the budget is also expected to go down to seven per cent in 2020.
Last S&P Global Ratings announced that it has started a 12-month countdown for Oman to steady its public finances and stop loading up on external debt or risk an even deeper descent into junk.
The rating agency placed the Sultanate on notice by cutting the outlook to negative while affirming its debt score at BB, reported Reuters.