Fitch Ratings has upgraded Oman’s outlook to positive while maintaining its IDR at BB+. The upgrade reflects improved fiscal responses and growing GDP per capita. In contrast, Egypt’s outlook was downgraded to 3.7% due to Suez Canal disruptions, but a rebound is expected in subsequent years. These adjustments underline differing economic conditions in Oman and Egypt.
Fitch Ratings has recently upgraded Oman’s long-term foreign currency issuer default rating (IDR) outlook from stable to positive while affirming its IDR at BB+. This decision is attributed to the nation’s fiscal capabilities, enhanced GDP per capita, and effective budget reforms that have led to a decrease in government debt relative to GDP. Despite this favorable outlook, Oman’s IDR still trails behind those of its Gulf neighbors, such as Saudi Arabia and the UAE, which hold ratings of A+ and AA-, respectively. Even though Oman maintains a positive outlook, factors such as high dependence on oil revenue and a net external debtor position weigh heavily on its ratings. Fitch forecasts a GDP growth of 1.8 percent for Oman in 2024, supported by a burgeoning non-oil economy. In contrast, the agency downgraded Egypt’s economic growth outlook to 3.7 percent for the fiscal year 2024/2025, impacted by disruptions in the Suez Canal, although a rebound to 5.1 percent is expected in the following year due to improvements in navigation and services. The overall projection considers Egypt’s recovering economy, albeit at a slower pace than previously anticipated, with an anticipated growth of 2.7 percent this fiscal year as noted by the International Monetary Fund. Overall, the reports reflect contrasting economic trajectories for Oman and Egypt, highlighting Oman’s strengthening economic indicators and Egypt’s challenges from external disruptions.
Fitch Ratings is a global leader in credit ratings and research, often providing critical insights into the economic stability of nations. The agency’s assessments, such as those concerning Oman and Egypt, hold substantial importance as they influence investor confidence and the economic strategies of these countries. Oman has displayed resilience through fiscal reforms and diversification efforts, earning a more favorable outlook. In contrast, Egypt faces hurdles stemming from disruptions in global trade routes, particularly the Suez Canal, which has affected revenue streams and growth prospects.
In conclusion, Oman enjoys a revised positive outlook from Fitch Ratings, underpinned by its effective fiscal strategies and non-oil growth potential. Conversely, Egypt’s economic growth forecasts have been downgraded, affected by the challenges posed by the Suez Canal disruptions. These differing assessments highlight Oman’s economic resilience while emphasizing the urgent need for Egypt to address external vulnerabilities to enhance its economic stability moving forward.
Original Source: www.arabnews.com
