Muscat: The Sultanate welcomed the concluding statement issued by the International Monetary Fund (IMF) following its recent staffing mission to Oman.
The virtual mission was part of the IMF’s 2021 Article 4 consultation with the Sultanate.
As part of this commitment, the IMF delegation had a series of discussions with various authorities of the Sultan, including the Ministry of Finance, the Ministry of Economy, the Central Bank of Oman, several other governmental and private organizations, and members of the public. . society.
During the 15-day mission, the delegation discussed recent macroeconomic developments, economic outlook and several other related topics. We also discussed Sultan’s response to the COVID-19 pandemic and recovery phase strategies.
The delegation also discussed the Sultanate’s fiscal policy, priorities and the implementation of the Medium Term Budget Plan (2020-2024). Discussions included deliberations on fiscal adjustment measures, financial and banking developments and various other structural reform programs initiated by the Sultanate.
Despite the uncertainties surrounding the global outlook due to the new variant of COVID-19 and its impact on Oman, the IMF’s mission is to immunize 70% of the measures taken by the Sultan to contain the pandemic. Admired the efforts to speed up the vaccination process in Oman. We are supporting the economic sectors most affected by the pandemic, including population growth, strengthening of a healthy business environment and the launch of an “economic stimulus package”.
The IMF’s mission is to hope that the Omani economy will gradually recover from the effects of the pandemic and achieve decent growth in the medium term. The statement further predicts that the Sultanate’s GDP will grow by around 2.5% in 2021 with an average growth rate of 3% in the medium term. Public debt is expected to decline over the medium term, but the efficiency of revenue and expenditure is expected to increase.
In the medium term, the current account deficit is expected to decrease to 0.6% of GDP due to the Sultanate’s fiscal consolidation measures and the expansion of the trade balance surplus.
The IMF’s mission was recently announced by the Sultan’s Budget and Financial Response and Medium-Term Budget Plan (MTFP) in 2021 to support various measures taken to address its financial weaknesses and economic recovery. He has shown to predict balance with initiative.
The mission also said that the initiative announced by the Sultanate to improve the performance of public sector enterprises is going in the right direction. They believed that these measures would not only strengthen the competitive environment for these companies, but would also help to increase the efficiency of the use of public resources.
In addition, the IMF mission commended the efforts of the Debt Management Unit to coordinate borrowing and manage the associated financial risks. In this regard, the IMF stressed that the adopted medium-term public debt strategy will improve the government’s borrowing program and allow for the forecasting of financing needs.
Regarding the government’s proposal to increasingly use renewable energy sources and ensure their optimal use, the mission is that this decision will not only create more jobs, but also attract domestic investment and foreigners. He said it would have a positive impact on the economy.
At the same time, the IMF mission welcomed the government’s plans to strengthen the efficiency and governance of public enterprises in order to improve competition and use public resources more efficiently. The process of creating a governance code for state-affiliated companies strengthens corporate governance, facilitates IPOs for state-affiliated companies and provides the necessary transparency.
The mission called on the Sultanate to strengthen its regulatory framework and continue implementing structural reforms in order to move towards higher growth. In addition to the implementation of policies aimed at increasing productivity, increasing the flexibility of the labor market, promoting investment and strengthening the business environment. These measures will strengthen the competitiveness and the capacity of the private sector to promote growth in the non-oil sector.
The Sultanate confirms its commitment to the implementation of the MTFP (2020-2024) and other structural reforms undertaken. With these measures, the Sultanate is striving to embark on the path of inclusive and sustainable growth.