Muscat – Oman’s government plans to issue government development bonds and sovereign local sukuk worth RO750mn in 2025. The planned local market issuances are part of the government’s strategy to meet financing requirements, covering both a projected budget deficit and public debt servicing.

The government will raise the total RO750mn from the local market through eight issues of government development bonds worth RO550mn and two issuances of sovereign local sukuk worth RO200mn, according to details outlined in the Ministry of Finance’s 2025 budget guidance.

The ministry has designed the borrowing plan for 2025 based on estimates outlined in the State’s General Budget for 2025. This includes projections for public debt, financing needs, and the financing structure for the year ahead.

Total financing requirements for 2025 are projected at RO2.454bn, which includes a budget deficit of RO620mn and RO1.834bn needed for debt servicing. The government intends to cover these requirements through a combination of local borrowing (RO750mn), external borrowing (RO1.304bn), and a withdrawal from reserves (RO400mn).

In 2024, the sultanate planned to raise RO600mn from local borrowing and RO1.285bn via external debt.

For 2025, issuances of government development bonds are planned for February (RO100mn), April (RO100mn), June (RO60mn), July (RO60mn), August (RO60mn), September (RO60mn), October (RO60mn), and December (RO50mn).

In addition, two issuances of local sovereign sukuk are scheduled for May (RO100mn) and November (RO100mn).

However, the Ministry of Finance has noted that the borrowing plan may be adjusted depending on actual financing needs and prevailing market conditions.

The ministry also highlighted that the 2025 borrowing plan is designed to meet the government’s financing needs at a reasonable cost while managing risk within acceptable levels. It aims to improve the efficiency of the local debt market by expanding the market for government securities. The plan also seeks to proactively manage debt, optimise financing costs, and diversify funding sources by broadening the investor base.

Preliminary results for the 2024 budget indicate a reduction in Oman’s public debt by 5.3% to RO14.4bn at the end of 2024, down from RO15.2bn at the start of the year.

Oman’s debt-to-GDP ratio stood at 34% by the end of 2024, a decrease from 36.5% in 2023. Additionally, public debt servicing costs fell to RO940mn in 2024, a 10.4% decline from the RO1.05bn originally estimated in the 2024 budget.

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