#Oman's economy to recover with overall growth of 2.2% in 2021: IIF | ZAWYA MENA Edition

Oman's economy to recover with overall growth of 2.2% in 2021: IIF | ZAWYA MENA Edition

Oman's economy is set to recover with overall growth of 2.2 percent in 2021 and 3.3 percent in 2022, as higher natural gas production and progress in vaccination, which will gradually restore domestic activity, International Institute of Finance (IIF) said in a new report.

This is lower than the 2.5 percent growth projected by the International Monetary in September. The economy contracted by 2.8 percent last year, according to IMF.

Oman’s recovery will be supported by progress made in fiscal adjustment and in structural reform implementation, the IIF report added.

“We expect the fiscal deficit to narrow to 2.3 percent of GDP in 2021 and 1.3 percent in 2022, supported by cuts in spending, tax reforms, and higher revenues from oil and natural gas,” said Garbis Iradian, Chief Economist, IIF.

S&P Ratings also recently upgraded Oman’s sovereign debt as the fiscal and current account balances are projected to improve substantially and as progress is being made in reforms.

As Oman’s government spending as a share of GDP was 42 percent in 2021—much higher than most developing and emerging economies—the authorities have scope to scale back spending and raise the efficiency of public investment, IIF said.