Oman’s economy on verge of slowing

As the global economy grapples with its worst financial disaster in decades, countries across the world are hoping that countercyclical spending will prevent or damp economic slowdowns or recessions.

The sultanate of Oman is the most recent addition to the swelling ranks of Keynesians. This month, the government pledged to increase spending by 11 per cent to OR6.4bn ($16.7bn).

While this will give Oman a budget deficit of about OR810m, or about 5 per cent of gross domestic product, policymakers are wary of the effect the credit crunch has had on oil prices and the country’s economy.