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New York-based ratings agency Fitch junked Oman’s credit rating this week, dropping it one notch from BBB-, the lowest investment grade, to BB+.
Fitch is so far the only one of the big three ratings agencies to have afforded Oman a sub-investment rating. Moody’s in March downgraded Oman to one rung above junk ( MEES, 23 March ), whilst S&P on 9 November affirmed Oman at BB with a stable outlook.
Oman has seen several downgrades since oil prices dived in the second half of 2014. Despite this year’s oil price recovery, Oman has been unable to improve its deficit-to-GDP ratio. This has “exposed the rigidity of public expenditure and weaknesses in Oman’s fiscal policy framework,” Fitch says in its 18 December ratings announcement. “We estimate Oman’s underlying fiscal stance has become more expansionary in 2018, as measured by a widening of the non-oil primary deficit.” (CONTINUED - 372 WORDS)