## IMF Staff Completes 2024 Article IV Mission to The Sultanate of Oman

_IMF News, November 18, 2024_

## Source details

**Canonical URL:** [IMF Staff Completes 2024 Article IV Mission to The Sultanate of Oman](https://www.imf.org/en/news/articles/2024/11/18/pr-24424-oman-imf-completes-2024-article-iv-mission)

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## Bibliographic details
- Published: November 18, 2024

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### Mission overview and context
- IMF staff team led by Mr. César Serra conducted discussions in Muscat during October 30-November 13.
- End-of-mission statement conveys preliminary findings; staff will prepare a report for the IMF's Executive Board subject to management approval.
- The statement notes that views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.

### Recent economic performance and key statistics
- Economic growth:
  - 1.2 percent in 2023.
  - 1.9 percent (year on year) in the first half of 2024.
  - Nonhydrocarbon sector growth: 1.8 percent in 2023 and 3.8 percent in the first half of 2024.
- Inflation:
  - 0.6 percent during January-September 2024.
  - 0.9 percent in 2023.
- Fiscal and external positions:
  - Fiscal and current account balances remained in comfortable surpluses (no numerical values provided beyond "surpluses").
  - Public sector debt declined further in 2023.
- Credit rating:
  - Oman’s sovereign credit rating has been upgraded recently to investment grade (as reported in the statement).

### Outlook and risks
- Growth outlook:
  - Growth is projected to remain at 1.2 percent this year.
  - Growth is set to rebound starting in 2025, supported by higher hydrocarbon production and continued acceleration of nonhydrocarbon growth.
- Fiscal and current account balances:
  - Expected to remain in surplus over the medium term, albeit somewhat lower than current levels as oil prices soften further.
- Key uncertainties and risks:
  - Oil price volatility.
  - Risks of a global economic slowdown.
  - Intensifying geopolitical tensions.

### Fiscal assessment and policy priorities
- Nonhydrocarbon primary deficit:
  - Poised to remain unchanged in 2024 relative to its 2023 level: 29 percent (as expected during the 2023 Article IV consultation).
- Policy priorities and recommendations:
  - Advance efforts to raise nonhydrocarbon revenues through:
    - Steadfast implementation of tax administration reforms and tax policy measures.
  - Phase out untargeted subsidies to free up resources for growth-enhancing investments supporting diversification.
  - Strengthen fiscal institutions by:
    - Enhancing public financial management.
    - Rolling out a full-fledged medium-term fiscal framework.
    - Adopting a fiscal rule.
    - Developing a sovereign asset-liability management framework.
  - Maintain prudent fiscal management while strengthening social safety nets.

### Monetary and financial sector assessment
- Exchange rate and monetary policy:
  - The exchange rate peg remains an appropriate and credible policy anchor for Oman.
  - Steadfast implementation of the Monetary Policy Enhancement Project is recommended to ensure monetary policy actions effectively transmit to the broader economy.
- Banking sector:
  - Banking sector remains sound: profitability recovered to pre-pandemic levels; capital and liquidity buffers are ample; asset quality remains strong.
- Financial sector development priorities:
  - Further develop financial markets.
  - Expand the institutional investor base.
  - Leverage digitalization to enhance access to finance and support diversification efforts.
  - Advance implementation of the financial sector development agenda to foster new funding opportunities for the private sector.

### Structural reforms and diversification agenda
- Oman Vision 2040 implementation:
  - Reform implementation is progressing decisively.
  - The new social protection law has been successfully rolled out.
  - Labor market reforms are ongoing.
  - Initiatives to improve the business environment, attract large-scale investments, and empower SMEs are underway.
  - SOE reforms under Oman Investment Authority continue advancing.
- Energy and digitalization:
  - Efforts are ongoing to scale up renewable energy production to reduce electricity generation costs and support green hydrogen economy prospects.
  - The digital transformation agenda is progressing.

### Mission acknowledgement
- The IMF staff team expressed appreciation to the Omani authorities and other counterparts for strong cooperation, candid discussions, and warm hospitality.

*Press Release No. 24/424 — November 18, 2024, IMF Staff Completes 2024 Article IV Mission to The Sultanate of Oman*

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## References

- [Oman and the IMF](http://www.imf.org/external/country/OMN/index.htm)
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_Source: https://www.imf.org/en/news/articles/2024/11/18/pr-24424-oman-imf-completes-2024-article-iv-mission_