Oman Outlook Positive

The International Monetary Fund said it expected Oman to gradually raise non-hydrocarbon growth to about 4% over the medium term, Reuters reported. In a statement on its website, IMF executive board said, Oman’s diversification efforts and the planned completion of major infrastructure projects are indicators to a positive outlook. The sultanate’s preliminary budget execution data point to a significant improvement in the fiscal position last year as higher oil prices and spending restraint brought the overall deficit down to below 13% of the GDP. The current account deficit is estimated to have improved by 3% points of GDP, given the government’s further reform efforts to improve non-hydrocarbon revenue, IMF’s executive board expects the deficit to drop to 4% of GDP in the next two years. Oman’s banking sector appears sound, with banks featuring high capitalization, low non-performing loans, and strong liquidity buffers, although private sector credit growth has somewhat moderated, and interest rates are likely to increase as US monetary policy normalization continues, credit growth is expected to remain healthy.