Oman Seeks IMF’s Technical Assistance; Bonds Inch Higher

The Sultanate of Oman has reached out to the IMF to seek technical assistance to manage its fiscal framework. The IMF released the Staff Concluding Statement with the Omani Government in which it said that the authorities have requested IMF’s help in strengthening its medium-term fiscal framework and in developing a medium-term debt strategy with the aim to guide the government’s borrowing program. According to the IMF, the Omani economy is expected to gradually recover from the pandemic over the medium turn. It revealed that the real GDP of the nation had contracted by 2.8% in 2020 and is projected to grow ~2.5% in 2021 and 3% average over the medium term benefitting from the hydrocarbon production. The inflation is also expected to increase to 3% in 2021 after it turned negative in 2020 due to low demand. 2020 also witnessed a deficit of ~19.3% of GDP due to lower oil revenues and slowdown of the economy and is projected to improve to -2.4% of GDP in 2021. While the IMF was positive about the medium term outlook of the country, it also cautioned about the uncertainties due to the emergence in the Covid-19 variants. It said, “Over the medium term, accelerating structural reforms is paramount to unlock growth potential (of Oman)…In this regard, the authorities have embarked on a broad range of structural reforms to further boost job creation, manage public resources more efficiently, and attract more private investment.”