Oman has requested technical support from the International Monetary Fund (IMF) to help the government create a medium-term debt strategy and enhance its fiscal framework, according to the IMF.
Last year’s twin shocks of low oil prices and the COVID-19 outbreak hit the Gulf oil producer hard, making it one of the region’s most financially vulnerable.
Due to reduced oil revenues and the economic downturn, the country’s real gross domestic product fell 2.8 percent, and the state budget deficit grew to 19.3% of GDP, according to the IMF.
Last year, Oman initiated austerity measures that helped it preserve access to foreign debt markets ahead of $11 billion in debt redemptions this year and next.
Since the 2014 oil price crash, the country’s debt-to-GDP ratio has risen from around 15% in 2015 to 80% last year, despite attempts to diversify the economy.
“The authorities have requested IMF technical assistance to help develop a medium-term debt strategy to guide the government’s borrowing program and provide more predictability to the financial system,” the IMF said.
Oman has also requested technical support to assist in the strengthening of the medium-term fiscal framework, according to the statement.
Because of a predicted increase in hydrocarbon output as well as the impact of the vaccination deployment, the IMF forecasts Oman’s economy to revive and grow by 2.5% this year.
Due to growing hydrocarbon revenues and Oman’s fiscal reforms, state finances are expected to improve, with the budget deficit expected to decrease to 2.4% of GDP this year and then move to a surplus in the medium term, according to the IMF.