Oman’s non-oil growth expected to accelerate to 2.6 pc in 2024
The International Monetary Fund (IMF) mission concluded its preliminary meetings with the government of the Sultanate of Oman during the period from 30 April to 8 May 2024 within the framework of Article IV consultations for the year 2024.
The Fund’s team and the Omani side discussed the most prominent recent economic and financial developments, the economic prospects in the near and medium term in light of regional and international developments, and public policy priorities in the Sultanate of Oman.
At the conclusion of the mission, the team issued a statement in which it indicated the continued positive growth of economic activity in the Sultanate of Oman, as the real GDP grew by 1.3 per cent in 2023, supported mainly by the expansion in nonoil activities.
Economic growth is to remain moderate at 0.9 per cent in 2024, as a result of extending the OPEC+ agreement on oil production cuts until the first half of this year (2024), however it is expected to accelerate to 4.1 per cent in 2025 as a result of the recovery of oil activities, in addition to the expected relaxation of restrictions imposed on OPEC+ quotas.
Furthermore, the mission statement also indicated that the growth of non-oil activities is expected to accelerate to 2.6 per cent in 2024 and 3.2 per cent in 2025 as a result of the government’s commitment to the reform plan and investment projects, compared to the growth recorded in 2023, which was 2.1 per cent.
The mission affirmed that the ongoing reform efforts and the continued favourable oil prices enhanced the public finance balance and the external account balance, as the fiscal balance recorded a surplus of 6.6 per cent of the GDP in 2023. The surplus balance is expected to continue in the medium term, supported by favourable oil revenues, growing non-oil revenues and continuing financial control efforts.
In addition, the mission indicated that the level of public sector debt as a percentage of GDP decreased significantly to 36.5 per cent in 2023, compared to 40.9 per cent in 2022, as the government continued to use part of the financial surplus to repay public debt.
The level of State-owned enterprises (SOES) debt stabilised at around 31 per cent of GDP.
The mission also praised the continued efforts in implementing the plan to reform SOES affiliated with Oman Investment Authority (OIA) as planned.