{
  "title": "IMF Executive Board Concludes 2022 Article IV Consultation with Oman",
  "publication": "IMF News, November 15, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/11/15/pr22386-oman-imf-executive-board-concludes-2022-article-iv-consultation-with-oman",
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  "summary": "IMF Executive Board Concludes 2022 Article IV Consultation with Oman",
  "publishDate": "2022-11-15",
  "sections": [
    {
      "heading": "Overview",
      "content": "- The Executive Board concluded the Article IV consultation with Oman and considered and endorsed the staff appraisal without a meeting.\n- Strong vaccination efforts allowed relaxation of all social distancing restrictions and the economic recovery is gaining traction.\n- Direct spillovers on the Omani economy from the war in Ukraine have been limited."
    },
    {
      "heading": "Economic outlook and projections",
      "content": "- Overall GDP growth:\n  - Rebounded from -3.2 percent in 2020 to 3.0 percent in 2021.\n  - Projected at 4.3 percent in 2022.\n- Real hydrocarbon GDP growth projected at 8.5 percent in 2022.\n- Real nonhydrocarbon GDP growth:\n  - 1.8 percent in 2020, 2.6 percent in 2021, 2.9 percent in 2022, and 3.4 percent in 2023.\n- Average inflation:\n  - Expected to rise to 3 percent in 2022.\n- Oil and gas:\n  - Total production of oil and gas (US$ billions): 27.1 (2019), 18.0 (2020), 24.3 (2021), 42.1 (2022), 37.0 (2023).\n  - Average crude oil export price (US$/barrel): 63.6 (2019), 46.0 (2020), 64.3 (2021), 95.0 (2022), 85.5 (2023).\n  - Crude oil production (in millions of barrels/day): 0.97 (2019), 0.95 (2020), 1.06 (2021), 1.13 (2022), 1.14 (2023)."
    },
    {
      "heading": "Fiscal and external balances",
      "content": "- Fiscal performance:\n  - The overall central government balance improved by 12.8 percentage points of GDP to a deficit of 3.2 percent in 2021.\n  - Fiscal and external surpluses are expected in 2022 and over the medium term.\n  - Central government debt:\n    - Declined to 62.9 percent of GDP in 2021.\n    - Expected to decline to about 44 percent of GDP in 2022.\n- Revenues and composition (percent of GDP, selected years):\n  - Revenue and grants: 29.6 (2019), 36.9 (2020), 34.1 (2021), 33.4 (2022), 32.4 (2023), 31.8 (2024).\n  - Hydrocarbon revenue: 25.8 (2019), 22.3 (2020), 26.6 (2021), 30.5 (2022), 26.8 (2023), 24.5 (2024).\n  - Nonhydrocarbon and grants: 8.1 (2019), 7.4 (2020), 7.3 (2021), 6.5 (2022), 6.6 (2023), 7.6 (2024).\n- Balance of payments and reserves:\n  - Current account balance (percent of GDP): -4.6 (2019), -16.6 (2020), -5.0 (2021), 1.7 (2022), 1.2 (2023).\n  - Central Bank gross reserves (in months of next year's imports): 5.9 (2019), 4.9 (2020), 5.8 (2021).\n  - Exports of goods (percent of GDP): 38.7 (2019), 33.5 (2020), 44.6 (2021), 64.0 (2022), 59.3 (2023)."
    },
    {
      "heading": "Financial sector and monetary policy",
      "content": "- Banking system:\n  - The banking system has weathered recent shocks relatively well; financial soundness indicators appear healthy.\n  - Private sector credit growth has remained subdued.\n- Monetary stance and exchange rate:\n  - The exchange rate peg remains appropriate and has provided a credible monetary anchor.\n  - Official foreign reserves, fiscal prudence, and structural reforms would continue to reinforce the peg.\n  - Better coordination between fiscal and monetary authorities, improved liquidity management, and deeper financial markets would improve capacity for a more independent monetary policy.\n- Recommended regulatory and supervisory actions:\n  - Continue close monitoring of bank asset quality and strengthen regulatory frameworks.\n  - Restore prudential rules to pre-pandemic levels.\n  - Enact the new Banking Law to align legislation with international best practices.\n  - Ensure banking system liquidity remains adequate while enhancing liquidity management framework and establishing the TSA.\n  - Progress in developing capital markets is welcome."
    },
    {
      "heading": "Risks, structural reforms, and policy recommendations",
      "content": "- Risks to the outlook:\n  - Upside risks: higher-than-expected hydrocarbon windfalls, accelerated implementation of structural reforms under Vision 2040, realization of investment projects from regional partners.\n  - Downside risks: uncertainty about the war in Ukraine and its impact on the global economy and oil prices, 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 hydrocarbon windfalls, and climate-related events.\n- Fiscal policy recommendations:\n  - Authorities remain committed to fiscal consolidation notwithstanding oil revenue windfalls and social pressures.\n  - Additional measures are needed to reinforce fiscal sustainability over the medium term and create space for social safety net reforms and higher capital expenditure.\n  - Efforts to strengthen tax administration and implement a PIT are welcome.\n  - The phased withdrawal of untargeted energy and water subsidies should be a priority, with intensive public outreach to sustain support for fiscal consolidation.\n  - Establish strong fiscal frameworks with clear objectives and a long-term anchor to support adoption of a fiscal rule.\n  - A fiscal rule based on the non-hydrocarbon structural primary balance could be appropriate.\n  - Developing a sovereign asset and liability management framework should be a priority.\n- Structural and institutional reforms:\n  - Steadfast implementation of Vision 2040 reforms is paramount to secure more inclusive, diversified, and sustainable growth.\n  - Strengthening the social safety net would help facilitate labor market flexibility reforms.\n  - Advancing SOE reforms to promote competition, strengthen governance, and stimulate private sector participation should be prioritized.\n  - Worker skills need upgrading to facilitate digital economy transformation.\n  - Pressing ahead with addressing climate challenges should be a priority."
    },
    {
      "heading": "Key quantitative indicators (selected)",
      "content": "- Nominal GDP (US$ billions): 88.1 (2019), 74.0 (2020), 85.9 (2021), 108.9 (2022), 111.0 (2023).\n- Nominal GDP (in billions of Omani rials): 33.9 (2019), 28.4 (2020), 33.0 (2021), 41.9 (2022), 42.7 (2023).\n- Central government debt (percent of GDP): 52.5 (2019), 69.7 (2020), 62.9 (2021), 43.7 (2022), 42.5 (2023), 41.7 (2024).\n- Gross capital formation (percent of GDP): 26.9 (2019), 28.3 (2020), 23.0 (2021), 23.2 (2022), 23.5 (2023).\n- Gross national savings (percent of GDP): 22.4 (2019), 15.3 (2020), 27.3 (2021), 26.0 (2022), 25.5 (2023).\n- Non-hydrocarbon structural primary balance (percent of non-hydrocarbon GDP): -36.3 (2019), -32.6 (2020), -34.1 (2021), -31.2 (2022).\n\nSource: IMF Executive Board Concludes 2022 Article IV Consultation with Oman (Press Release No. 22/386), November 15, 2022.\n\n---\n\n\n References\n\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/2022/11/15/pr22386-oman-imf-executive-board-concludes-2022-article-iv-consultation-with-oman"
    }
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    "Published: November 15, 2022",
    "The Executive Board concluded the Article IV consultation with Oman and considered and endorsed the staff appraisal without a meeting.",
    "Strong vaccination efforts allowed relaxation of all social distancing restrictions and the economic recovery is gaining traction.",
    "Direct spillovers on the Omani economy from the war in Ukraine have been limited.",
    "Overall GDP growth:",
    "Real hydrocarbon GDP growth projected at 8.5 percent in 2022.",
    "Real nonhydrocarbon GDP growth:",
    "Average inflation:",
    "Oil and gas:",
    "Fiscal performance:",
    "Revenues and composition (percent of GDP, selected years):",
    "Balance of payments and reserves:",
    "Banking system:",
    "Monetary stance and exchange rate:",
    "Recommended regulatory and supervisory actions:",
    "Risks to the outlook:",
    "Fiscal policy recommendations:",
    "Structural and institutional reforms:",
    "Nominal GDP (US$ billions): 88.1 (2019), 74.0 (2020), 85.9 (2021), 108.9 (2022), 111.0 (2023).",
    "Nominal GDP (in billions of Omani rials): 33.9 (2019), 28.4 (2020), 33.0 (2021), 41.9 (2022), 42.7 (2023).",
    "Central government debt (percent of GDP): 52.5 (2019), 69.7 (2020), 62.9 (2021), 43.7 (2022), 42.5 (2023), 41.7 (2024).",
    "Gross capital formation (percent of GDP): 26.9 (2019), 28.3 (2020), 23.0 (2021), 23.2 (2022), 23.5 (2023).",
    "Gross national savings (percent of GDP): 22.4 (2019), 15.3 (2020), 27.3 (2021), 26.0 (2022), 25.5 (2023).",
    "Non-hydrocarbon structural primary balance (percent of non-hydrocarbon GDP): -36.3 (2019), -32.6 (2020), -34.1 (2021), -31.2 (2022).",
    "[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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