IMF praises Sultanate's efforts to strengthen economy
April 14, 2019 | 5:13 PM
by Agencies
Image credits: @IMFNews on Twitter

Washington: The International Monetary Fund (IMF) praised the Sultanate's economic efforts aimed at strengthening the status of public finance, promoting growth driven by the private sector, creating jobs, promoting economic diversification, improving labour market performance, building human capital, enhancing the business environment and increasing productivity and competitiveness.

"The economic activity in the Sultanate is gradually recovering," the IMF said in a statement posted on its website, commenting on a visit of the team led by Stéphane Roudet to Muscat. It added that the provisional data on budget execution indicate an improvement in the overall fiscal balance last year. The fiscal deficit is estimated to have declined to about 9 percent of the GDP from 13.9 percent of GDP in 2017, reflecting higher oil revenues.

The statement added that the “The fiscal deficit is projected to decline to about 8 percent of the GDP this year, as the impact of low oil prices is more than offset by a decline in spending, one-off revenue, and implementation of a new excise tax on selected products".

The IMF said that “External buffers remain adequate. Gross international reserves of the Central Bank of Oman (CBO) increased by about US$ 1.3 billion in 2018 to US$ 17.4 billion. The government’s external assets in the State General Reserve Fund, Oman’s sovereign wealth fund, provide additional buffers. The exchange rate peg to the U.S. dollar is appropriate considering the structure of the economy".

The IMF also praised the Sultanate's recent adoption of “important reforms in the areas of commercial law and arbitration and licensing procedures. Oman Vision 2040’s emphasis on fiscal sustainability, governance and rule of law is welcome".

It added, “Further efforts to strengthen the business environment, including by reducing obstacles to foreign direct investment, fostering competition, and further easing trade barriers would help strengthen external competitiveness".

The IMF statement added, “Accelerating diversification efforts under the Tanfeedh program could also help raise non-hydrocarbon exports. Banks benefit from high capitalization, low non-performing loans, and strong liquidity buffers. Maintaining strong regulation and supervision will help strengthen resilience and ensure sustained growth".

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