Moody’s Investors Service yesterday warned Oman that high inflation and ambitious public investment plans are contributing to a marked loosening of fiscal policy which will erode fiscal flexibility.
Tristan Cooper, a Moody’s vice-president and senior analyst, said: “The first concern relates to inflation, which has risen significantly in recent years, reaching a 16-year high of 8.3 per cent in December 2007.
“There are growing uncertainties over the long-term outlook for the country’s hydrocarbon sector. Oman’s crude oil production peaked in the late 1990s and has since been on a declining trend.
The rating agency yesterday gave Oman's foreign and local currency bonds an A2 rating with a stable outlook, which reflect very strong public finances. The ratings were last changed in July 2007 when they were upgraded from A3.
Moody’s warns Oman over high inflation