IslamicFinance.de

Low oil revenues are prompting the government of Oman to sell $2 billion in Islamic bonds to raise funds for the national budget. The hole in Oman’s national budget will measure 12% of gross domestic product (GDP) this year, though forecasts predict the shortfall will decrease in coming years. Oman is also considering forging public-private partnerships to balance the cost burdens of nationalized industries. The country announced earlier that it would sell stakes in state-owned oil and gas downstream companies, but no concrete action has been taken. S&P Global Ratings lowered the monarchy’s credit rating from BBB- to BB+. As a response, finance minister Darwish Al Balushi said that Oman was confident of its economy and the country's reserves were still in a comfortable position.

S&P dropped a bombshell on Thursday, downgrading the sovereign credit rating for Saudi Arabia by two notches. The ratings agency also slashed credit rating for Brazil, Kazakhstan, Bahrain and Oman as the pain from low oil prices continues to undermine the economic and financial foundations of commodity exporters around the world. The decision to cut Saudi Arabia’s rating was the most striking decision though. As the world’s largest oil-producer, sitting on some of the largest reserves in the world, Saudi Arabia has been a bastion of financial stability for a long time. But it is also has a highly undiversified economy, dependent on oil for nearly all of its export earnings and budget revenues. Last October, S&P cut Saudi Arabia’s rating one level.