According to the World Bank, after a year of economic hardship caused by the COVID-19 pandemic and low oil prices, Oman’s GDP is anticipated to increase by 2.5 percent in 2021 and 6.5 percent in 2022.
The World Bank noted in its latest Gulf Economic Update study, titled ‘COVID-19 Pandemic and the Road to Diversification,’ that the GCC economies are expected to return to an aggressive growth path.
‘Oman’s economy is expected to recover in 2021, albeit at a weak 2.5 percent growth rate, as a large infrastructure investment program finds traction, following a significant fall in 2020. Over the predicted period (2021-2023), medium-term growth is expected to average 5.3 percent,’ according to the research.
According to the World Bank, Oman’s economy would rebound significantly in 2022, with 6.5 percent growth, the fastest among the GCC countries. According to the bank, the sultanate’s economy will rise by 4.2 percent in 2023.
According to the World Bank, the COVID-19 pandemic, as well as the decline in global oil demand and prices, has caused a health crisis and a commodity market shock in the GCC countries, resulting in a 4.8 percent GDP contraction in 2020.
According to the bank, Oman’s GDP growth in 2020 will be negative 6.3%.
According to the World Bank, Oman’s non-oil economy will contract by 9% in 2020 compared to 2019. The non-oil economy’s mainstay, the services sector, contracted across the board, dragged down by lockdowns, travel bans, and supply chain disruptions.
It will be in the past and all dificts will start declining
According to the World Bank, the gradual implementation of reforms under the Medium-Term Fiscal Plan (2020–2024) should help Oman reduce its fiscal deficit over the forecast period.
‘The implementation of a 5% value-added tax in April 2021 is expected to increase revenues beginning in 2021. Revenues will also be supported by higher oil prices and increased gas production over the forecast period, as well as proceeds from planned privatisations of some oil and utility assets,’ the bank said.
According to the World Bank, Oman’s fiscal deficit is expected to be reduced to 3.3% of GDP by 2023. ‘However, the deficits imply that Oman’s debt ratio will remain elevated, at around 70% of GDP over the forecast period, and debt servicing costs will remain high.’