According to the global financial agency, the International Monetary Fund (IMF), the resurgence of the hydrocarbon industry and the easing of COVID-19 social constraints are helping Oman’s economy to rebound.
An IMF report stated that Oman’s debt dropped to 62.9 percent of the Gross Domestic Product (GDP) in 2021 and was projected to drop to about 44 percent of GDP in 2022.
Due to administered prices and price caps on selected fuels, Oman’s inflation has been kept in check. However, a recovery in economic activity and increased global inflationary pressures are expected to raise Oman’s average inflation to 3 percent in 2022, given the relatively high dependence on imports and hefty tradable items in the Consumer Price Inflation basket.
“High oil prices and fiscal consolidation under the authorities’ Medium-Term Fiscal Plan (MTFP), have improved fiscal and external balances considerably. The overall central government balance improved by 12.8 basis points of GDP to a deficit of 3.2 percent in 2021, largely due to higher oil revenue, expenditure restraint, and the introduction of VAT,” IMF official Mr. Daniel Kanda said in a statement.
According to the fund, central government debt decreased to 62.9 percent of GDP in 2021 and is predicted to drop to roughly 44 percent of GDP in 2022. Government finances have improved, and fiscal and external surpluses are anticipated in 2022.
“Key priorities include enhancing labor market flexibility, boosting female employment, improving the business environment, advancing SOE reforms, leveraging digitalization, and continuing the implementation of green initiatives. However, heightened global uncertainties continue to cloud the outlook, with downside risks dominating in the short run, the IMF remarked.