Mubasher: Oman plans to tap capital markets for the fourth successive year to fill its budget shortfall, one of the largest of all countries tracked by Fitch Ratings.

The sultanate’s debt is expected to grow to 58% of gross domestic product (GDP) by 2020, up from 48% in 2018, according to Fitch Ratings, which lowered Oman’s sovereign rating to one level below investment grade in December. 

Oman, the biggest Arab producer outside of the Organization of Petroleum Exporting Countries (OPEC), aims to raise OMR 2.4 billion ($6.4 billion) locally and internationally, the Oman news agency reported, citing a state budget plan.

Borrowing will cover 86% of the Gulf nation’s OMR 2.8 billion fiscal gap, while the remaining OMR 400 million will be financed by the country’s reserves, Bloomberg News said.

Oman has started to depend on borrowing three years ago after oil prices fell in 2014, ending a two-decade absence from foreign capital markets.

Focusing on foreign borrowing in 2018 was to “avoid crowding out the private sector in meeting its financing needs, as well as to enhance foreign currency cash flows and reserves,” the finance ministry said in the budget statement.

Higher oil prices helped Oman to raise $6.5 billion in 2018 from debt sales, down from the expected $7.5 billion. The Gulf nation raised $18 billion from the sale of dollar bonds since the beginning of 2016, data compiled by Bloomberg indicated.