Oman: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Oman

IMF Staff Country Reports, September 12, 2021

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Oman: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Oman

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Bibliographic details

• Published: September 12, 2021
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781513596020.002

Background and shocks

• Sultan Haitham ascended to the throne in January 2020 and committed to implementing strong fiscal and structural reforms to address longstanding vulnerabilities.
• Oman faced persistent fiscal deficits arising from incomplete adjustment to lower oil prices since 2015.
• In 2020 Oman experienced twin shocks: the COVID-19 pandemic and a collapse in oil prices, which amplified fiscal and external vulnerabilities.
• The authorities moved rapidly to contain the spread of COVID-19 infections and provided broad-based policy measures to limit its impact on the economy.

Fiscal policy, Medium-Term Fiscal Plan (MTFP), and budget measures

• Frontloaded fiscal consolidation has been implemented in the 2021 budget as part of the authorities’ Medium-Term Fiscal Plan (MTFP).
• The MTFP aims to eliminate the fiscal deficit over the medium term.
• Persistent fiscal deficits prior to 2021 were linked to incomplete adjustment to lower oil prices since 2015.

Monetary, financial sector, and risks

• Banks have high capital buffers and liquidity.
• Credit risk is a concern going forward.

Structural reforms and diversification

• Structural reforms have been accelerated under Oman Vision 2040.
• Reform objectives include boosting non-oil private sector growth and facilitating job creation.

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