## IMF Staff Concludes 2022 Article IV Mission to Oman

_IMF News, October 5, 2022_

## Source details

**Canonical URL:** [IMF Staff Concludes 2022 Article IV Mission to Oman](https://www.imf.org/en/news/articles/2022/10/05/pr22337-oman-imf-staff-concludes-2022-article-iv-mission)

## Other formats

- [Markdown version](/en/news/articles/2022/10/05/pr22337-oman-imf-staff-concludes-2022-article-iv-mission/index.md)
- [Structured JSON version](/en/news/articles/2022/10/05/pr22337-oman-imf-staff-concludes-2022-article-iv-mission/index.json)
- [Bundle manifest](/en/news/articles/2022/10/05/pr22337-oman-imf-staff-concludes-2022-article-iv-mission/bundle-manifest.json)

## Bibliographic details
- Published: October 5, 2022

---

### Mission context and statement
- Press Release No. 22/337 — October 5, 2022.
- An IMF mission, led by Mr. Daniel Kanda, conducted discussions in Muscat for the 2022 Article IV Consultation from September 20 to October 4, 2022.
- End-of-Mission press release conveys preliminary findings; views are those of IMF staff and do not necessarily represent the IMF’s Executive Board.
- IMF staff will prepare a report based on the mission’s preliminary findings that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.

### Economic recovery and inflation
- "Oman’s economic recovery is gaining traction, supported by revival in the hydrocarbon sector and the relaxation of Covid-19 social restrictions."
- GDP growth:
  - Rebounded from -3.2 percent in 2020 to 3.0 percent in 2021.
  - Projected at 4.3 percent in 2022, supported by increased hydrocarbon production and continued recovery of non-hydrocarbon economic activity.
- Inflation:
  - CPI inflation has been contained thus far, partly reflecting administered prices and caps on selected fuel prices.
  - Average inflation is expected to rise to 3 percent in 2022 given the relatively high dependence on imports and large weight of tradable items in the CPI basket.
- "Direct spillovers on the Omani economy from the war in Ukraine have been limited."

### Fiscal and external positions
- Fiscal improvement driven by high oil prices and fiscal consolidation under the authorities’ Medium-Term Fiscal Plan (MTFP).
- Central government balance:
  - Improved by 12.8 percentage points of GDP to a deficit of 3.2 percent in 2021, largely due to higher hydrocarbon revenue, expenditure restraint, and the introduction of VAT.
  - Fiscal and external surpluses are expected in 2022 and over the medium term.
- Central government debt:
  - Declined to 62.9 percent of GDP in 2021.
  - Expected to decline to about 44 percent of GDP in 2022.
- Recommendation: "Steadfast implementation of MTFP and further strengthening fiscal frameworks would reinforce fiscal sustainability."

### Financial sector soundness
- "Benefiting from prudent oversight of the Central Bank of Oman and strong buffers, the banking system has weathered the recent shocks relatively well."
- Financial soundness indicators appear healthy, benefiting from the strong buffers before entering the crisis.
- Private sector credit growth has remained subdued.
- Assessment: Financial system risks are low, but close monitoring of banks’ asset quality remains important.

### Structural reforms and development priorities
- Authorities continue implementation of structural reforms under Oman Vision 2040 aimed at "strong, job-rich, and sustainable private sector-led growth."
- Key priorities listed by IMF staff:
  - Enhancing labor market flexibility.
  - Boosting female employment.
  - Improving the business environment.
  - Advancing SOE reforms.
  - Leveraging digitalization.
  - Continuing the implementation of green initiatives.

### Risks and scenarios
- "Uncertainties continue to cloud the outlook, with downside risks, notably from global sources, dominating in the short run."
- Upside factors:
  - Higher-than-expected hydrocarbon windfalls.
  - Accelerated implementation of structural reforms under Vision 2040.
  - Realization of investment projects from regional partners.
- Downside risks:
  - Uncertainty about the war in Ukraine and its impact on the global economy and oil prices.
  - A renewed flare-up of COVID-19 infections.
  - Tighter-than-expected global financial conditions.
  - Increased inflationary pressures from higher global food and energy prices.
  - More persistent disruption in global supply chains.
  - Pressures to spend the hydrocarbon windfalls.
  - Climate-related events.

### Closing
- "The IMF staff team would like to thank the Omani authorities and other counterparts for the open and candid discussions and their warm hospitality."

*IMF Communications Department — MEDIA RELATIONS*

---


## References

- [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/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2022/10/05/pr22337-oman-imf-staff-concludes-2022-article-iv-mission_