Oman’s Public Debt Service Drops 8% as Sovereign Credit Rating Gains Drive Lower Financing Costs

Official statistical indicators published by the National Centre for Statistics and Information (NCSI) demonstrate continuous improvement in the Sultanate of Oman’s macroeconomic stability, as the total cost of public debt servicing fell by 8% to OMR 291 million by the end of May, reflecting sustained multi-year fiscal consolidation.

Disciplined Fiscal Trajectory

Public debt servicing costs dropped from OMR 1.076 billion in 2022 and OMR 1.044 billion in 2023 to OMR 936 million in 2024, continuing its downward momentum to OMR 880 million in 2025 against initial budgetary allocations of OMR 915 million.

In the approved State General Budget, debt service appropriations stand at approximately OMR 911 million, representing roughly 10% of total current government expenditures. The budget estimates are anchored on a conservative baseline oil price of $60 per barrel. With realized oil prices remaining above benchmark levels, the Ministry of Finance continues to direct fiscal surpluses toward proactive debt buybacks and liability optimization.

Proactive Debt Management & Sovereign Upgrades

Oman’s disciplined liability management strategy focuses on three core pillars:

• International Bond Buybacks: Successfully executing a $117 million buyback of international sovereign bonds, reducing external debt principal and mitigating future refinancing risks.
• Refinancing at Competitive Margins: Securing a 5-year syndicated loan of approximately OMR 385 million at tight, competitive interest rate margins, directly enabled by consecutive sovereign credit rating upgrades across major international rating agencies.
• Deepening the Domestic Bond Market: Issuing targeted local treasury instruments and settling maturing debt obligations to rebalance external-to-domestic debt ratios and build resilient sovereign yield curves.

“Maintaining public debt within safe, prudent thresholds while aggressively driving down debt servicing costs liberates fiscal space for developmental spending, social protection programs, and productive economic investments.”

— Ministry of Finance Macroeconomic Review

Long-Term Macroeconomic Equilibrium

Total public debt stabilized at OMR 14.16 billion, reflecting a substantial structural contraction from peak debt-to-GDP levels of 68% recorded in 2020. Through consistent prepayment schedules and prudent sovereign asset-liability management, Oman cements long-term fiscal sustainability aligned with the overarching pillars of Oman Vision 2040.

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