Is Oman in Debt?
Short Answer
Yes, Oman carries significant government debt accumulated primarily during the period of low oil prices from 2015 to 2020. Public debt rose from minimal levels to roughly forty percent of GDP but has been declining as higher oil revenues and fiscal reforms have enabled the government to reduce borrowing and repay maturing obligations.
Detailed Answer
Oman entered the oil price downturn of 2014 with relatively low public debt, but the sharp decline in revenues forced the government to borrow heavily to finance ongoing expenditure commitments. Debt was raised through a combination of international bond issuances, syndicated loans, and domestic borrowing.
By 2020, total government debt had reached roughly twenty billion Omani rials, representing approximately forty-five percent of GDP. The rapid debt accumulation prompted concern among international investors and contributed to credit rating downgrades that increased borrowing costs further.
The government responded with the Medium-Term Fiscal Plan, which established binding targets for deficit reduction and a ceiling on public debt. Key measures included subsidy reforms, the introduction of value-added tax, enhanced non-oil revenue collection, and restraint on current expenditure growth. These reforms, combined with the recovery in oil prices, enabled Oman to return to fiscal balance and begin reducing the debt stock.
Debt management strategy has also focused on extending maturities and diversifying the investor base to reduce refinancing risk. The government has successfully issued sukuk and conventional bonds in international markets, demonstrating continued access to capital. The trajectory of debt reduction will depend on sustained fiscal discipline and the path of oil prices.