IMF praises Oman progress but lowers GDP forecast amid global risks

The International Monetary Fund (IMF) has lowered its forecast for Oman's GDP growth to 4.3 per cent in 2022, although higher oil prices, fiscal consolidation measures and progress on structural reforms are supporting a post-pandemic economic recovery.

This compares with the IMF's 4.5 per cent estimate in June.

"Uncertainties continue to cloud the outlook, with downside risks, notably from global sources, dominating in the short run," the IMF said in a statement after a mission to Oman.

Oman swung to a budget surplus in the first half of 2022, easing pressure on public finances and improving its ability to meet debt obligations.

The IMF expects Oman to post fiscal and external surpluses in 2022 and over the medium term, due mainly to higher oil revenue, fiscal discipline and the introduction of value added tax. Central government debt is expected to fall to 44 per cent of GDP in 2022 from 62.9 per cent last year, it added.

Inflation was projected to average three per cent in 2022, although this is lower than the 3.7 per cent that the IMF projected in June.

The fund cautioned, however, that private sector credit growth remained "subdued".

Oman's economy remains primarily reliant on revenue from hydrocarbons despite plans to diversify into sectors such as tourism, logistics and renewables.

The government has also undertaken structural reforms as part of an economic development plan, but progress on job creation has remained slow and there has been limited success in attracting foreign investment from beyond the immediate region. — Reuters