Moody's Investors Service ("Moody's") has today downgraded the long-term issuer and senior unsecured bond ratings of the Government of Oman to Ba1 from Baa3. The outlook remains negative. The key driver of the downgrade is Moody's expectation that the scope for fiscal consolidation will remain more significantly constrained by the government's economic and social stability objectives than it had previously assessed. As a result, in an environment of moderate oil prices, Oman's fiscal metrics will weaken to a level that is consistent with a lower rating.
 
The negative outlook reflects Moody's view that the balance of risks to the Ba1 rating is skewed to the downside. In particular, foreign investors' willingness to finance Oman's large deficits at relatively low costs could weaken, exacerbating the sovereign's external vulnerability and raising government liquidity pressures.