Oman`s future economic outlook is expected to improve according to a statement of His Excellency Dr. Nasser bin Rashid Al Mawali, the Undersecretary of the Ministry of Economy and a Board Member at the Oman Investment Authority.
The latest statistics published by the Ministry of Economy indicate that the government debt is expected to stabilise due to greater production levels and higher oil prices. The success of national and international vaccination programs will aid the global recovery which will benefit the Sultanate of Oman and the travel and tourism sectors especially.
In addition, the introduction of economic reforms combined with the implementation of the value added tax (VAT) this year will improve the economic outlook in the second and third quarter and improve the credit ratings of the country.
According to the Ministry of Economy, the government is expected to collect OMR 300 million (USD 780 million) in revenues from VAT in 2021 and OMR 400 million (USD 1 billion) in revenues from VAT in 2022. The current and effective budget deficit stands at OMR 750 million (USD 2 billion) as of the first quarter of 2021.
The first quarter decline in revenues is attributed to the pandemic and the fluctuations in oil prices. In addition, the government has been restructuring strategic investments.
The International Monetary Fund (IMF) has published the latest Global Economic Outlook report recently. It forecasts positive economic growth of 1.8% in 2021. Furthermore, it indicates that Oman’s economy is expected to record a real growth of 7.4% in 2022.
The IMF’s positive predictions are in the line with Standard & Poor’s affirmation of Oman’s long- and short-term sovereign credit rating at B + / B in April 2021 while maintaining a stable outlook.
The Sultanate of Oman intends to introduce income tax paid on high-income earners from 2022 in order to increase the government’s revenues.
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