The government of Oman has posted a deficit of OMR2bn (7.5% of GDP) in the first five months of 2017, according to figures from the National Centre for Statistics & Information. This amount equals two thirds of Oman’s budgeted deficit of OMR3.0 billion for 2017 and signals that there is an increased likelihood that the sovereign will miss its budgetary targets for the second year in a row. The Omani government has indicated plans a projected budget for 2018 of OMR12.5bn, with expected revenues of OMR9.5bn and a OMR3bn deficit. The deficit will be met by dipping into state reserves and borrowing from markets, according to a statement issued by the Parliament’s Economic and Financial Affairs Committee. Moody’s credit agency cut its rating for Omani debt to Baa2 in July 2017, with a negative outlook. The key driver for the rating downgrade is that in Moody’s view progress towards addressing structural vulnerabilities to a weak oil price environment has been more limited than expected, reflecting institutional capacity constraints to address the large fiscal and external imbalances.