[Oman-L] Oman's economic future stable: Moody's

[Joachim Duester]

Oman's economic future stable: Moody's   
Source: Oman Daily Observer, 18 February 2009

Moody's International Credit Rating report placed the Sultanate at A2 level alongside with South Korea, Chile and Botswana. The report expects stable economic future for the Sultanate.

This rating of the Sultanate came as a result of a number of factors covered by Moody’s report, such as the increase in the strength of the economy, the institutional power, the financial power of the government and the decrease in the speed of being affected by risks.

The report pointed out that the increase in the strength of the economy came as a result of the relative increase in the GDP and ability to pay the debt liabilities, as well as the increase in the GDP per capita in terms of purchasing power which is estimated by the International Monetary Fund (IMF) at $ 22,000. These factors placed the Sultanate in the 36th place among 181 countries covered by the IMF report.

The report pointed out that the increase in the institutional power is attributed to the clean record of the Sultanate in paying its loan liabilities in time and the good transparent government in terms of financial assets. The rise in the government financial strength comes also as a result of the financial surplus which has been collected during the last five years and the building of foreign financial assets which will enable the Sultanate’s government to supply the expected deficit in 2009/2010 budget due to slump in oil prices.

The report also pointed out that the reserves of the government assets will enable the Sultanate to face the expenditure without resorting to foreign loans. This rating might be affected if these reserves have been severely exhausted, the report added. The report attributed the low possibility of the Sultanate to be affected by the risks to its stable political environment and distinguished relations with other countries. The report affirmed continuity of current global economic slowdown (if it continued) will be a challenge for providing job opportunities for the growing number of Omani youths.