Fitch Ratings upgraded Oman’s outlook to positive, citing strong fiscal tools and economic reforms, while downgrading Egypt’s growth forecast to 3.7% due to Suez Canal disruptions. Oman is projected to grow by 1.8% in 2024, whereas Egypt is expected to recover to 5.1% by 2025/26, indicating contrasting economic conditions in the GCC region.
Fitch Ratings has upgraded Oman’s long-term foreign currency issuer default ratings to positive from stable, maintaining the IDR at BB+. The revision is attributed to Oman’s fiscal strategies aimed at managing potential economic shocks, reflecting successful budget reforms and reduced government debt relative to GDP. Despite a positive outlook, Oman’s rating is still below those of regional counterparts like Saudi Arabia and the UAE, which hold IDRs of A+ and AA-, respectively. Meanwhile, Oman’s economic growth is anticipated to rise by 1.8% in 2024, driven by expansion in the non-oil sector, while budget projections for 2025 suggest a narrowing surplus to 0.7% of GDP before shifting to a deficit in 2026.
In a contrasting report, Fitch has downgraded Egypt’s economic growth outlook for the fiscal year 2024/2025 to 3.7%, down from a previous forecast of 4.2%. This adjustment is primarily linked to complications in the Suez Canal. Nevertheless, Egypt’s economy is expected to gain momentum, reaching 5.1% growth in 2025/26, spurred by stabilization in maritime navigation and enhancements in the services sector. While the International Monetary Fund projects a 2.7% growth for the current fiscal year, overall conditions in Egypt’s financial institutions are expected to improve due to rising investor confidence and favorable foreign currency liquidity conditions.
The economic assessments of Oman and Egypt by Fitch Ratings provide insight into the financial health and growth prospects of these Gulf nations. Oman has shown resilience through fiscal reforms that mitigate risks tied to oil dependency, while Egypt faces challenges due to Suez Canal disruptions affecting its economic outlook. Understanding these dynamics helps contextualize the ratings and forecasts that influence investor confidence and regional economic stability.
In summary, Fitch Ratings’ revision of Oman’s outlook to positive emphasizes the country’s adaptive fiscal tools and economic resilience, despite its lower IDR compared to neighbors. Conversely, Egypt’s downgraded economic outlook reflects the persistent challenges induced by logistical disruptions, though future recovery is anticipated due to improvements in the services sector and better navigation conditions. These insights underscore the varying economic trajectories of these countries in the Gulf region.
Original Source: www.arabnews.com
