'Oman economy to grow by 4.7% in 2022'

Oman's economy is expected to grow by 4.7 per cent in 2022, Arab Economic Outlook Report by the Arab Monetary Fund (AMF) said on Thursday.

This growth will be driven by both oil and non-oil activities, by 8.6 per cent and 2.9 per cent, respectively.

The 17th report on the Arab Economic Outlook has stated that the Omani economy is expected to grow by 5.7 per cent during 2023.

The report also highlighted the many measures taken by the Oman government at the level of public finance and monetary policy, which were sufficient to provide support to investors and companies.

The oil production in the Sultanate of Oman is expected to witness an increase of 9 per cent in 2022. This will have a positive impact on the volume of financial savings and investment expenditures in Oman, according to the AMF report.

Following the upgrade of Oman’s credit rating by several international agencies to ‘stable’ outlook, experts are attributing it to the country’s commitment to fiscal performance control procedures, initiatives in line with the Medium-Term Fiscal Plan (2020-2024), and higher oil prices that improved economic and financial indicators.

Fitch raised Oman’s credit rating to ‘BB’ on Tuesday. Earlier, Standard & Poor's amended its credit rating to ‘BB-, with a stable outlook’ and Moody’s from ‘negative’ to ‘stable’.

The direct factors that prompted Fitch’s action were the performance of fiscal control measures undertaken within the context of the Medium-Term Fiscal Plan, ability to ease external borrowing pressure, sustained efforts to reform general finance, and a sharp fall in general debt owing to high oil prices.

Arab economies are expected to post an economic growth rate of 5.4 per cent in 2022, a significant increase from about 3.5 per cent in 2021, because of rising oil prices, increase in production for Arab oil-exporting countries, and the continuation of reforms that promote growth, according to the Arab Economic Outlook Report.

GCC countries are expected to record a relatively high growth rate of 6.3 per cent, compared to 3.1 per cent in 2021, while 2023 will see a decline to 3.7 per cent in economic growth.

The report warned that Arab countries are likely to face relatively high inflation rates for the rest of 2022 due to local and global inflationary pressures.

The report, which includes macroeconomic forecasts, growth and inflation forecasts for Arab economies for 2022 and 2023, pointed that the global economy is experiencing challenges related to the global supply chains and high commodity prices, which raise concerns about global food security. As a result, international institutions have reduced their forecasts for global economic growth issued in January 2022.

AMF expects Arab countries’ economic growth slow to about 4 per cent in 2023 due to the decline in global economic growth, commodity prices, and gradual exit from expansionary fiscal and monetary policies.