Oman’s public debt set for substantial decline: IMF

BUSINESS REPORTER

MUSCAT, JUNE 19

The Sultanate of Oman welcomed the concluding statement of the International Monetary Fund (IMF) staff visit following its mission in Muscat, which came as part of the preparations for 2022 Article IV consultations. In the statement, the IMF staff noted their appreciation of the discussions held with the Central Bank of Oman (CBO), Ministry of Finance, Ministry of Economy, Oman Investment Authority, National Centre for Statistics and Information and other institutions.

The concluding statement lauded the substantial efforts exerted by the Omani government to mitigate the impacts of the Covid-19 pandemic and foster recovery, as well as the fiscal measures targeting social support and helping private sector recovery in the pandemic’s aftermath. It also commended the role of control measures adopted by the government to strengthen public finance and the CBO’s efforts to enhance regulatory and supervisory frameworks.

Regarding the outlook, real GDP grew by 3 per cent in 2021, and it is expected to grow at a rate of 4.5 per cent in 2022, driven primarily by the hydrocarbon activities. The IMF projects improvement in fiscal balance indicators through achieving an estimated surplus of 5.5 per cent of GDP in 2022, with surpluses persisting over the medium-term. It also expects a decline in the central government debt from about 63 per cent of GDP in 2021 to 45 per cent of GDP in 2022, along with improvement in the current account balance to a surplus of 6.8 per cent of GDP in 2022, buoyed by higher oil prices and supported by the prudent fiscal measures adopted by the government to reduce spending and strengthen non-oil revenues.

Furthermore, the IMF stressed that despite the global geopolitical, economic and health challenges, it is possible to achieve higher oil revenues and accelerate the implementation of structural reforms in line with Oman Vision 2040.

In a final note, the concluding statement commended Oman’s cooperation and efforts towards achieving the visit’s objectives and the government’s commitment and drive towards economic recovery.