Economy Top Stories

Oman’s economy to grow by 2.2% in 2021:IIF

IIF mentioned they expect fiscal deficit to narrow to 2.3% of GDP in 2021 and 1.3% in 2022

Oman’s economy is projected to grow by 2.2 percent in 2021 and 3.3 percent in 2022, as mentioned in a report by the International Institute for Finance (IIF). The growth is supported by higher gas production and a successful vaccination campaign which is expected to gradually restore the country’s economy. Previously, the country’s economy contracted by 2.8 percent in 2020 due to the impact of the Covid-19 pandemic

The latest predicted number is lower than the previously predicted 2.5 percent growth by the International Monetary Fund (IMF) in September. The healing of the country’s economy is supported by the development by the progress made in fiscal adjustment and in structural reform implementation, as mentioned in the report.

Garbis Iradian, Chief Economist, IIF told the media, “We expect the fiscal deficit to narrow to 2.3 percent of GDP in 2021 and 1.3 percent in 2022, supported by cuts in spending, tax reforms, and higher revenues from oil and natural gas.”

S&P also recently upgraded Oman’s sovereign debt after fiscal and current account balances are expected to improve substantially. The ratings agency gave Oman B+/B’ long- and short-term foreign and local currency sovereign credit ratings. The country is a small oil producer and compared to its oil-rich Gulf neighbours, it is more sensitive, which means it was hit worse during the Covid-19 pandemic.

It expected the fiscal deficit to decrease to 4.2 percent of gross domestic product (GDP) this year from 15.3 percent of GDP in 2020.

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