Oman’s Gross Domestic Product (GDP) is expected to grow by 2.5 per cent in 2018, up from 1.5 per cent in 2016, the Euler Hermes Credit Agency said in a report published on its website.
The agency also forecast that the deficit in the Sultanate’s current account will fall to 11 per cent of the GDP in 2018, compared with 12 per cent in 2017. The financial deficit is also expected to fall to 7 per cent of the GDP in 2018, down from 9 per cent in 2017.
It pointed out that the measures adopted by the government have contributed to the decline in the budget deficit, due to the sharp drop in oil prices in 2016. The measures included increasing the corporate tax rate to 15 per cent from 12 per cent, and removing various tax exemptions.
The agency added that the measures are aimed at facing the sharp drop in financial revenues due to the steep slide in oil prices.
It also noted that the modest recovery in oil prices in 2017 (average $54 per barrel year-to-date, compared with $45 in 2016) should help improve state revenues and narrow the fiscal deficit to about 9 per cent of the GDP.
“The Omani government was able to almost complete its foreign borrowing plan for this year by issuing $5 billion (worth) of international bonds in March 2017,” the report added.
The agency pointed out that the major strengths of the Sultanate include its strategic location on the Strait of Hormuz and closeness to the Gulf, Asian and African markets, comfortable foreign exchange reserves, as well as assets in the sovereign wealth fund and the state commitment to industrialisation, economic diversification and development, in addition to modern infrastructures (roads, airports, sea ports and telecommunications).