{
  "title": "IMF Executive Board Concludes 2019 Article IV Consultation with Oman",
  "publication": "IMF News, July 3, 2019",
  "sourceUrl": "https://www.imf.org/en/news/articles/2019/07/03/pr19266-imf-executive-board-concludes-2019-article-iv-consultation-with-oman",
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  "summary": "Date: July 3, 2019",
  "publishDate": "2019-07-03",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Date: July 3, 2019\n- Since the 2014 oil price shock, policy focus: strengthening the fiscal position, enhancing private sector‑led growth and employment, and encouraging diversification.\n- Recovery drivers in 2018: rebound in oil prices and increased oil and gas production."
    },
    {
      "heading": "Economic activity and projections",
      "content": "- Real non-hydrocarbon GDP growth: reached a low of ½ percent in 2017 and increased to about 1½ percent in 2018.\n- Real hydrocarbon GDP growth: estimated 3.1 percent in 2018.\n- Overall real GDP growth: 2.2 percent in 2018.\n- Non-hydrocarbon growth projection: reach about 4 percent over the medium term, assuming continued diversification efforts.\n- Selected projections (annual real GDP growth, annual percentage change):\n  - 2018: 2.2\n  - 2019: 0.3\n  - 2020: 5.9\n  - 2021: 2.1\n  - 2022: 0.9\n  - 2023: 1.4\n  - 2024: 1.7"
    },
    {
      "heading": "Fiscal position and public debt",
      "content": "- Fiscal deficit estimated to have declined to about 9 percent of GDP in 2018 from 13.9 percent of GDP in 2017.\n- Gross government debt increased by 7 percent of GDP in 2018 to 53.5 percent of GDP.\n- Central government finances (percent of GDP):\n  - Revenue and grants: 37.1 in 2018; projected 37.2 in 2019; 36.3 in 2020.\n  - Hydrocarbon revenue: 29.2 in 2018; 27.7 in 2019; 27.6 in 2020.\n  - Nonhydrocarbon and grants: 10.4 in 2018; 10.8 in 2019; 11.0 in 2020.\n  - Expenditure: 46.3 in 2018; 44.3 in 2019; 43.3 in 2020.\n  - Current expenditure: 36.0 in 2018; 34.8 in 2019; 35.1 in 2020.\n  - Capital expenditure: 8.2 in 2018; 8.0 in 2019.\n  - Overall balance (Net lending/borrowing): -9.0 in 2018; -7.2 in 2019; -7.0 in 2020.\n- Non-hydrocarbon primary balance (in percent of non-oil GDP):\n  - 2018: -48.6\n  - 2019: -45.4\n  - 2020: -42.2\n  - 2021: -38.5\n  - 2022: -36.6\n  - 2023: -34.7\n  - 2024: -32.9\n- Total government debt trajectory:\n  - 2018: 53.5\n  - 2019: 58.7\n  - 2020: 61.1\n  - 2021: 62.2\n  - 2022: 69.3\n  - 2023: 73.1"
    },
    {
      "heading": "External sector and reserves",
      "content": "- Current account deficit estimate for 2018: -3.7 (in billions of U.S. dollars) and percent of GDP: -4.7.\n- Current account projections (percent of GDP): 2019: -5.9; 2020: -4.0; 2021: -3.8; 2022: -4.9; 2023: -6.0; 2024: -6.7.\n- Exports of goods (US$ billions):\n  - 2018: 41.6\n  - 2019: 39.9\n  - 2020: 41.8\n  - 2021: 43.9\n  - 2022: 46.5\n- Oil and gas component of exports (US$ billions):\n  - 2018: 25.5\n  - 2019: 24.3\n  - 2020: 23.9\n- Imports of goods (US$ billions): 2018: -23.5; 2019: -24.2; 2020: -25.1; 2021: -26.3; 2022: -27.7; 2023: -29.4; 2024: -31.3.\n- Central Bank gross reserves (in months of next year's imports of goods and services):\n  - 2016: 5.5\n  - 2017: 5.8\n  - 2018: 5.2\n  - 2019: 4.4\n  - 2020: 4.3"
    },
    {
      "heading": "Financial sector",
      "content": "- Private sector credit growth moderated: 5.6 percent in 2018.\n- Banks: high capitalization, low non-performing loans, and strong liquidity buffers.\n- Interest rates: increased due to U.S. monetary policy normalization.\n- Directors urged continued attention to regulation and supervision and further efforts in enhancing the AML/CFT framework to support correspondent banking relationships."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Directors welcomed steps to enhance private sector growth, reduce spending growth, diversify government revenue, and improve the business environment.\n- Concerns: public and external vulnerabilities have continued to grow; sovereign credit rating downgrades and increases in sovereign risk premia were noted.\n- Fiscal policy recommendations:\n  - Deeper fiscal adjustment to maintain confidence and ensure fiscal and external sustainability.\n  - Expeditious introduction of VAT.\n  - Measures to adjust government expenditure.\n  - Lay out and implement an ambitious medium‑term fiscal adjustment plan based on:\n    - Reforms to tackle current spending rigidities.\n    - Streamlining public investment.\n    - Raising non‑hydrocarbon revenue.\n  - Prioritize measures that limit the impact on growth and place more of the adjustment on those who can best shoulder it.\n  - Enhance fiscal governance and transparency; a formal medium‑term fiscal framework recommended to anchor consolidation and limit implementation risks.\n  - Authorities’ plan to carry out a Public Expenditure Review with World Bank support described as useful.\n- Exchange rate policy:\n  - Exchange rate peg to the US dollar \"had delivered low and stable inflation and remained appropriate.\"\n  - Recommended fiscal adjustment seen as key to bringing the external position more in line with fundamentals and supporting the currency peg.\n- Structural reforms:\n  - Continue implementation of the Tanfeedh Program focusing on economic diversification and job creation.\n  - Address labor market rigidities by better aligning public‑sector compensation with the private sector and addressing skills mismatches through higher quality education and training.\n  - Encourage further SME development, including better access to finance, to raise productivity."
    },
    {
      "heading": "Selected key indicators (highlights from data table)",
      "content": "- Oil and gas total production (US$ billions): 2015: 21.7; 2016: 16.0; 2017: 18.6; 2018: 26.6; 2019 (Proj.): 23.7.\n- Average crude oil export price (US$/barrel): 2015: 56.5; 2016: 40.1; 2017: 51.3; 2018: 69.7; 2019 (Proj.): 65.1.\n- Crude oil production (millions of barrels/day): 2015: 0.98; 2016: 1.00; 2017: 0.97; 2018: 1.09; 2019 (Proj.): 1.12.\n- Nominal GDP (US$ billions): 2018: 79.3; 2019 (Proj.): 77.6; 2020 (Proj.): 80.3.\n- Consumer prices (average): 2018: 1.8; 2019 (Proj.): 3.8; 2020 (Proj.): 3.4.\n- Gross capital formation (percent of GDP): 2018: 31.5; 2019 (Proj.): 31.8; 2020 (Proj.): 32.0.\n- Gross national savings (percent of GDP): 2018: 26.8; 2019 (Proj.): 25.9; 2020 (Proj.): 28.0.\n- Total external debt (percent of GDP): 2018: 80.2; 2019 (Proj.): 86.8; 2020 (Proj.): 91.8.\n- Nominal effective exchange rate (2010=100): 2015: 116; 2016: 117; 2017: 119; 2018: 118.\n\nIMF Executive Board press release, July 3, 2019.\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/2019/07/03/pr19266-imf-executive-board-concludes-2019-article-iv-consultation-with-oman"
    }
  ],
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    "Published: July 3, 2019",
    "Date: July 3, 2019",
    "Since the 2014 oil price shock, policy focus: strengthening the fiscal position, enhancing private sector‑led growth and employment, and encouraging diversification.",
    "Recovery drivers in 2018: rebound in oil prices and increased oil and gas production.",
    "Real non-hydrocarbon GDP growth: reached a low of ½ percent in 2017 and increased to about 1½ percent in 2018.",
    "Real hydrocarbon GDP growth: estimated 3.1 percent in 2018.",
    "Overall real GDP growth: 2.2 percent in 2018.",
    "Non-hydrocarbon growth projection: reach about 4 percent over the medium term, assuming continued diversification efforts.",
    "Selected projections (annual real GDP growth, annual percentage change):",
    "Fiscal deficit estimated to have declined to about 9 percent of GDP in 2018 from 13.9 percent of GDP in 2017.",
    "Gross government debt increased by 7 percent of GDP in 2018 to 53.5 percent of GDP.",
    "Central government finances (percent of GDP):",
    "Non-hydrocarbon primary balance (in percent of non-oil GDP):",
    "Total government debt trajectory:",
    "Current account deficit estimate for 2018: -3.7 (in billions of U.S. dollars) and percent of GDP: -4.7.",
    "Current account projections (percent of GDP): 2019: -5.9; 2020: -4.0; 2021: -3.8; 2022: -4.9; 2023: -6.0; 2024: -6.7.",
    "Exports of goods (US$ billions):",
    "Oil and gas component of exports (US$ billions):",
    "Imports of goods (US$ billions): 2018: -23.5; 2019: -24.2; 2020: -25.1; 2021: -26.3; 2022: -27.7; 2023: -29.4; 2024: -31.3.",
    "Central Bank gross reserves (in months of next year's imports of goods and services):",
    "Private sector credit growth moderated: 5.6 percent in 2018.",
    "Banks: high capitalization, low non-performing loans, and strong liquidity buffers.",
    "Interest rates: increased due to U.S. monetary policy normalization.",
    "Directors urged continued attention to regulation and supervision and further efforts in enhancing the AML/CFT framework to support correspondent banking relationships.",
    "Directors welcomed steps to enhance private sector growth, reduce spending growth, diversify government revenue, and improve the business environment.",
    "Concerns: public and external vulnerabilities have continued to grow; sovereign credit rating downgrades and increases in sovereign risk premia were noted.",
    "Fiscal policy recommendations:",
    "Exchange rate policy:",
    "Structural reforms:",
    "Oil and gas total production (US$ billions): 2015: 21.7; 2016: 16.0; 2017: 18.6; 2018: 26.6; 2019 (Proj.): 23.7.",
    "Average crude oil export price (US$/barrel): 2015: 56.5; 2016: 40.1; 2017: 51.3; 2018: 69.7; 2019 (Proj.): 65.1.",
    "Crude oil production (millions of barrels/day): 2015: 0.98; 2016: 1.00; 2017: 0.97; 2018: 1.09; 2019 (Proj.): 1.12.",
    "Nominal GDP (US$ billions): 2018: 79.3; 2019 (Proj.): 77.6; 2020 (Proj.): 80.3.",
    "Consumer prices (average): 2018: 1.8; 2019 (Proj.): 3.8; 2020 (Proj.): 3.4.",
    "Gross capital formation (percent of GDP): 2018: 31.5; 2019 (Proj.): 31.8; 2020 (Proj.): 32.0.",
    "Gross national savings (percent of GDP): 2018: 26.8; 2019 (Proj.): 25.9; 2020 (Proj.): 28.0.",
    "Total external debt (percent of GDP): 2018: 80.2; 2019 (Proj.): 86.8; 2020 (Proj.): 91.8.",
    "Nominal effective exchange rate (2010=100): 2015: 116; 2016: 117; 2017: 119; 2018: 118.",
    "[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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