Fiscal Position Rankings
GCC Fiscal Indicators (IMF estimates, 2024-2025):
| Country | Gross Debt/GDP | Breakeven Oil Price | SWF Assets (est.) | Credit Rating (S&P) |
|---|---|---|---|---|
| Qatar | ~45% | ~45-50 | $450B+ (QIA) | AA |
| UAE | ~30% | ~50-55 | $1.5T+ (ADIA+others) | AA |
| Saudi Arabia | ~26% | ~78-85 | $900B+ (PIF) | A |
| Kuwait | ~5% | ~55-60 | $900B+ (KIA) | A+ |
| Oman | ~36% | ~65-70 | $50B+ (OIA) | BB+ |
| Bahrain | ~120% | ~95-100 | $20B+ (Mumtalakat) | B+ |
Analysis
Oman occupies a vulnerable but improving fiscal position within the GCC. The Sultanate’s debt-to-GDP ratio has declined from a peak of approximately 67 percent in 2020 to around 36 percent in 2024-2025, reflecting disciplined fiscal consolidation, higher oil revenues, and the partial privatisation of state assets including the OQEP IPO. This trajectory represents the most significant fiscal improvement in the GCC over the period.
However, Oman’s structural fiscal challenge remains: the sovereign wealth fund buffer (OIA at approximately $50 billion) is an order of magnitude smaller than those of the UAE, Saudi Arabia, Kuwait, or Qatar. This means Oman has less capacity to absorb prolonged oil price downturns, making the speed of economic diversification a genuine fiscal survival question rather than a policy preference.
Breakeven Analysis
Oman’s fiscal breakeven oil price has declined from approximately $85-90 per barrel in 2019 to an estimated $65-70 in 2024-2025 — a remarkable improvement driven by expenditure discipline, subsidy reform, corporate tax implementation, and revenue diversification. The breakeven trajectory is critical: every dollar reduction in the breakeven price extends the fiscal runway available for Vision 2040 investment. Convergence with the UAE’s breakeven (~$50-55) would represent fiscal transformation, but requires sustained non-oil revenue growth and continued expenditure restraint.
Credit Rating Trajectory
Oman’s BB+ rating reflects the fiscal improvement but remains sub-investment grade. Achieving investment-grade status (BBB-) would substantially reduce sovereign borrowing costs and unlock access to a broader base of institutional fixed-income investors. The pathway requires sustained fiscal surpluses, continued debt reduction, and demonstrated non-oil revenue resilience through an oil price cycle.
Implications for Investors
Oman’s improving fiscal trajectory creates opportunities in sovereign and corporate debt markets, where spread compression offers capital gains potential. The credit rating upgrade cycle, if sustained, would trigger index inclusion effects and institutional portfolio rebalancing flows into Omani fixed income.
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