{
  "title": "IMF Executive Board Concludes 2018 Article IV Consultation with Oman",
  "publication": "IMF News, July 6, 2018",
  "sourceUrl": "https://www.imf.org/en/news/articles/2018/07/06/pr18280-executive-board-concludes-2018-article-iv-consultation-with-oman",
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  "summary": "Non-hydrocarbon economic growth: about 2 percent in 2017 (up from 1.5 percent in 2016).",
  "publishDate": "2018-07-06",
  "sections": [
    {
      "heading": "Economic performance and outlook",
      "content": "- Non-hydrocarbon economic growth: about 2 percent in 2017 (up from 1.5 percent in 2016).\n- Overall real GDP growth: -0.3 percent in 2017, driven by a contraction of oil output of -2.8 percent due to OPEC+ agreement implementation.\n- Authorities’ expectations: government diversification efforts and planned completion of major infrastructure projects are expected to gradually raise non-hydrocarbon growth to about 4 percent over the medium term.\n- Oil and gas sector projections:\n  - Total production of oil and gas (US$ billions): 39.9 (2014), 22.8 (2015), 16.8 (2016), 20.0 (2017), 25.3 (2018), 25.9 (2019), 24.7 (2020), 24.8 (2021), 23.6 (2022), 23.1 (2023).\n  - Average crude oil export price (US$/barrel): 103.2 (2014), 56.5 (2015), 40.1 (2016), 51.3 (2017), 61.5 (2018), 58.2 (2019), 55.6 (2020), 54.1 (2021), 53.6 (2022).\n  - Crude oil production (in millions of barrels/day): 0.94 (2014), 0.98 (2015), 1.00 (2016), 0.97 (2017), 1.06 (2018), 1.08 (2019), 1.11 (2020), (no value listed for 2021–2023)."
    },
    {
      "heading": "Fiscal and external positions",
      "content": "- Fiscal performance:\n  - Preliminary budget execution data indicate improvement in 2017 as higher oil prices and spending restraint brought the overall deficit down to below 13 percent of GDP.\n  - Authorities plan further reforms to raise non-hydrocarbon revenue (introducing value-added and excise taxes) and intend to continue spending restraint, which would bring the deficit to around 4 percent of GDP in the next two years.\n- Central government finances (percent of GDP highlights):\n  - Revenue and grants: 46.3 (2014), 34.9 (2015), 29.3 (2016), 31.1 (2017), 36.1 (2018), 36.9 (2019), 35.8 (2020), 34.7 (2021), 32.9 (2022), 32.1 (2023).\n  - Hydrocarbon revenue: 27.9 (2014), 20.7 (2015), 27.0 (2016), 25.0 (2017), 23.9 (2018), 22.1 (2019), 21.0 (2020).\n  - Nonhydrocarbon and grants: 6.1 (2014), 7.0 (2015), 8.6 (2016), 9.1 (2017), 9.9 (2018), 10.8 (2019), 10.7 (2020), 11.0 (2021).\n  - Expenditure: 48.2 (2014), 51.6 (2015), 49.8 (2016), 44.1 (2017), 40.8 (2018), 39.5 (2019), 39.1 (2020), 38.9 (2021), 38.8 (2022).\n  - Overall balance (Net lending/borrowing): -15.9 (2014), -20.9 (2015), -12.7 (2016), -5.0 (2017), -3.5 (2018), -4.0 (2019), -4.8 (2020), -6.3 (2021), -7.0 (2022).\n  - Non-hydrocarbon primary balance (in percent of non-oil GDP): -74.9 (2014), -60.4 (2015), -50.1 (2016), -44.5 (2017), -40.2 (2018), -37.8 (2019), -35.5 (2020), -33.7 (2021), -32.1 (2022), -30.3 (2023).\n- External sector:\n  - Current account balance (in US$ billions or percent of GDP): -11.0, -12.3, -11.2, -5.5, -4.9, -6.1, -7.6, -8.3 (table shows both levels and percent of GDP in different rows).\n  - Central Bank gross reserves: 17.5 (no year label in table), 20.3 (no year label).\n  - Total external debt (percent of GDP and levels shown across table): 28.0, 45.7, 60.0, 65.9, 67.9, 70.4, 72.8, 76.4, 82.7, 52.3, 68.3, 83.1, 82.1, 80.9, 81.4, 81.0, 82.3, 85.9 (as presented in the table).\n- Directors’ view: ongoing reforms and the recovery in oil prices would help reduce fiscal and external deficits significantly over the next couple of years, but persistent twin deficits are expected to lead to further increases in government and external debt over the medium term without deeper adjustment."
    },
    {
      "heading": "Financial sector and monetary policy",
      "content": "- Banking sector: appears sound, with banks featuring high capitalization, low non-performing loans, and strong liquidity buffers.\n- Credit and monetary indicators:\n  - Credit to the private sector: 14.9 (2014), 13.9 (2015), 10.1 (2016), 6.5 (2017), 6.0 (2018), 6.3 (2019), 6.8 (2020), 6.2 (no year label).\n  - Broad money: 10.0 (2014), 4.2 (2015), 5.8 (2016).\n- Directors’ recommendations:\n  - Maintain robust banking sector regulation and supervision.\n  - Identify and closely monitor emerging pressures on asset quality and any potential build up in financial sector risks.\n  - Ensure prudential framework and financial sector buffers remain strong.\n  - Strengthen liquidity and crisis management and preparedness frameworks at the central bank.\n  - Enhance the AML/CFT framework and its effective implementation."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Main assessment:\n  - Directors noted fiscal and current account deficits since 2014 had pushed government and external debt up and reduced external buffers.\n  - Directors concurred that ongoing reforms and the recovery in oil prices would help reduce fiscal and external deficits significantly over the next couple of years, but highlighted risks from possible fiscal underperformance, tighter financing conditions, and heightened regional political uncertainty.\n- Fiscal policy recommendations:\n  - Accelerate reforms to bolster fiscal and external sustainability, maintain confidence, and support the exchange rate peg.\n  - Deeper fiscal adjustment is critical to put public finances on a sustainable trajectory.\n  - Implement ongoing reforms, including the introduction of a VAT and excise taxes, under the planned timeline.\n  - Additional measures to achieve more rapid reductions in the fiscal deficit and debt: tackle current spending rigidities, streamline capital outlays and enhance efficiency, and further raise non-hydrocarbon revenue.\n  - Introduce a formal medium term fiscal framework and improve budget planning and expenditure controls.\n- Exchange rate and monetary policy:\n  - Directors concurred that the exchange rate peg had delivered monetary policy credibility with low and stable inflation.\n  - Fiscal adjustment is key to ensure external sustainability over the long term.\n- Structural reforms to boost private sector and employment:\n  - Promote private sector development and productivity to enhance competitiveness, diversification, and job creation for nationals.\n  - Address labor market inefficiencies by better aligning public sector wages and benefits with the private sector, making the labor market for nationals more flexible, and tackling skill mismatches through better education and on the job training.\n  - Enhance the business climate: modernize the insolvency framework, lower the burden of administrative procedures, and enact planned legislations on FDI and public private partnerships.\n  - Accelerate the program to boost private sector investment."
    },
    {
      "heading": "Selected key statistics (2014–23, as presented)",
      "content": "- Nominal GDP (US$ billions): 81.1 (2014), 68.9 (2015), 66.8 (2016), 72.2 (2017), 80.3 (2018), 84.0 (2019), 86.5 (2020), 89.9 (2021), 92.8 (2022), 96.3 (2023).\n- Nominal GDP (in billions of Omani rials): 31.2 (2014), 26.5 (2015), 25.7 (2016), 27.8 (2017), 30.9 (2018), 32.3 (2019), 33.3 (2020), 34.6 (2021), 35.7 (2022), 37.0 (2023).\n- Real GDP growth (annual percentage change): 2.8 (2014), 4.7 (2015), 1.8 (2016), -0.3 (2017), 2.1 (2018), 5.7 (2019), 2.9 (2020), 3.1 (2021), 1.1 (2022), 1.5 (2023).\n- Consumer prices (average): 0.1 (2014), 1.6 (2015), 2.5 (2016), 3.2 (2017), 3.4 (2018).\n- Gross capital formation (percent of GDP): 28.8 (2014), 34.3 (2015), 35.3 (2016), 34.0 (2017), 33.5 (2018), 33.2 (2019), 33.1 (2020), 32.4 (2021).\n- Gross national savings (percent of GDP): 33.6 (2014), 17.2 (2015), 16.9 (2016), 18.5 (2017), 26.6 (2018), 27.6 (2019), 26.2 (2020), 24.9 (2021), 23.8 (2022), 17.0 (2023).\n- Exports of goods (US$ billions, table entries): 27.5, 41.9, 43.1, 43.2, 44.3.\n- Imports of goods (table entries): -27.9, -26.6, -21.3, -24.1, -26.0, -27.1, -28.4, -30.0, -31.6, -33.5.\n- Nominal effective exchange rate (2010=100): 106.6 (2014), 116.2 (2015), 116.8 (2016), 118.5 (2017).\n- Real effective exchange rate (2010 = 100): 103.9 (2014), 111.3 (2015), 111.4 (2016), 112.2 (2017).\n- Exchange rate (rial per dollar; period average): 0.38 (value shown).\n\nIMF Executive Board Concludes 2018 Article IV Consultation with Oman (Press Release No. 18/280), July 6, 2018.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Oman and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2018/07/06/pr18280-executive-board-concludes-2018-article-iv-consultation-with-oman"
    }
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    "Published: July 6, 2018",
    "Non-hydrocarbon economic growth: about 2 percent in 2017 (up from 1.5 percent in 2016).",
    "Overall real GDP growth: -0.3 percent in 2017, driven by a contraction of oil output of -2.8 percent due to OPEC+ agreement implementation.",
    "Authorities’ expectations: government diversification efforts and planned completion of major infrastructure projects are expected to gradually raise non-hydrocarbon growth to about 4 percent over the medium term.",
    "Oil and gas sector projections:",
    "Fiscal performance:",
    "Central government finances (percent of GDP highlights):",
    "External sector:",
    "Directors’ view: ongoing reforms and the recovery in oil prices would help reduce fiscal and external deficits significantly over the next couple of years, but persistent twin deficits are expected to lead to further increases in government and external debt over the medium term without deeper adjustment.",
    "Banking sector: appears sound, with banks featuring high capitalization, low non-performing loans, and strong liquidity buffers.",
    "Credit and monetary indicators:",
    "Directors’ recommendations:",
    "Main assessment:",
    "Fiscal policy recommendations:",
    "Exchange rate and monetary policy:",
    "Structural reforms to boost private sector and employment:",
    "Nominal GDP (US$ billions): 81.1 (2014), 68.9 (2015), 66.8 (2016), 72.2 (2017), 80.3 (2018), 84.0 (2019), 86.5 (2020), 89.9 (2021), 92.8 (2022), 96.3 (2023).",
    "Nominal GDP (in billions of Omani rials): 31.2 (2014), 26.5 (2015), 25.7 (2016), 27.8 (2017), 30.9 (2018), 32.3 (2019), 33.3 (2020), 34.6 (2021), 35.7 (2022), 37.0 (2023).",
    "Real GDP growth (annual percentage change): 2.8 (2014), 4.7 (2015), 1.8 (2016), -0.3 (2017), 2.1 (2018), 5.7 (2019), 2.9 (2020), 3.1 (2021), 1.1 (2022), 1.5 (2023).",
    "Consumer prices (average): 0.1 (2014), 1.6 (2015), 2.5 (2016), 3.2 (2017), 3.4 (2018).",
    "Gross capital formation (percent of GDP): 28.8 (2014), 34.3 (2015), 35.3 (2016), 34.0 (2017), 33.5 (2018), 33.2 (2019), 33.1 (2020), 32.4 (2021).",
    "Gross national savings (percent of GDP): 33.6 (2014), 17.2 (2015), 16.9 (2016), 18.5 (2017), 26.6 (2018), 27.6 (2019), 26.2 (2020), 24.9 (2021), 23.8 (2022), 17.0 (2023).",
    "Exports of goods (US$ billions, table entries): 27.5, 41.9, 43.1, 43.2, 44.3.",
    "Imports of goods (table entries): -27.9, -26.6, -21.3, -24.1, -26.0, -27.1, -28.4, -30.0, -31.6, -33.5.",
    "Nominal effective exchange rate (2010=100): 106.6 (2014), 116.2 (2015), 116.8 (2016), 118.5 (2017).",
    "Real effective exchange rate (2010 = 100): 103.9 (2014), 111.3 (2015), 111.4 (2016), 112.2 (2017).",
    "Exchange rate (rial per dollar; period average): 0.38 (value shown).",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Oman and the IMF](http://www.imf.org/external/country/OMN/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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