Oman is expected to record GDP growth of just 1.8 per cent in 2016 and 1.7 per cent in 2017, according to the latest World Economic Outlook from the Washington-based IMF.

This compares to 4.1 per cent GDP growth in 2015.

GDP growth in the sultanate will fall further to 1 per cent in 2019, and only recover to 2.1 per cent in 2021. This is after an average growth rate of 3.8 per cent between 1998 and 2015.

Lower oil prices, which are expected to continue for several years, are having a serious impact on Oman’s fiscal position.

Oman’s current account deficit will balloon from 12.6 per cent in 2015 to 25.1 per cent in 2016, the IMF predicts. It will moderate slightly in 2017 to 19.6 per cent, then to 8.5 per cent deficit by 2021.

The fiscal balance will remain in deficit through to 2021. Government revenue is projected to stagnate below RO9bn until 2018, or around 40 per cent of GDP, then gradually rise to RO10.6bn by 2021. Expenditures are expected to increase gradually, from RO12bn, or 60.2 per cent of GDP in 2016 to RO13.6bn or 51.3 per cent of GDP in 2021.

Gross debt will jump from 20.6 per cent of GDP in 2015, to 35.5 per cent of GDP in 2016, then increase at a more gradual rate to 60.5 per cent of GDP by 2021. Oman will remain a net lender until 2019 thanks to the reserves built up when oil prices were high. Net debt will then rise rapidly to 30.8 per cent of GDP by 2021.

Consumer price inflation will remain low, at 0.2 per cent in 2015 and 0.3 per cent in 2016. It will pick up to 2.8 per cent in 2016.

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