Rating agency Fitch has downgraded Oman to BB-, three notches below junk, and maintained its ‘negative’ outlook for the sultanate in what amounts to yet another harsh indicator of its long-term fiscal woes. The downgrade is one of several in recent years as Oman’s low-growth, soaring debt economy increasingly worries onlookers (MEES, 26 June).

Fitch forecasts a OR4.8bn ($12.5bn) deficit in 2020 due mostly to low oil prices, and warns that “the size of any GCC [financing] package will be calibrated to facilitate but not meaningfully replace debt market funding” – in other words, Oman’s neighborly ties won’t be enough to cover its mounting deficit. Instead, Muscat will increasingly look to debt markets to fill the void, which given its increasingly negative outlook, will not be cheap. (CONTINUED - 128 WORDS)