Oman’s economy firmly on the road to recovery
Muscat: Financial indicators for the first quarter of 2022 confirm that Oman’s economy is in recovery mode. The general state budget achieved a financial surplus of more than OMR 300 million, the officials and financial experts said, adding that it reflects the efforts made by the government and the measures taken by the government in this direction, supported as it was by rising oil prices. in world markets.
Dr Nasser bin Rashid Al Maawali, Undersecretary of the Ministry of Economy, said: “The Sultanate of Oman’s improved financial performance at the end of the first quarter of this year reflects the efforts and measures taken by the government to ensure sustainability. financial and economic conditions, supported by stable average world oil prices,” adding that “the financial surplus will be tapped and directed to stimulate growth. It will help increase spending on priority development projects to serve the economic and social dimensions, as well as reduce the level of public debt.
In a statement to the Oman News Agency, he said the economic and financial indicators of performance are very reassuring, and with the improvement in the financial performance of the Sultanate of Oman as indicated by different sectors of the economy, it is hoped that the will help to further accelerate economic growth and financial activities in the country.
He pointed out that the financial and economic indicators for the first quarter of this year reflect the ability of the financial and economic planning system to positively manage various global conditions and variables, whether those related to market variables in the world. energy or global supply and supply chain. systems.
He said that the continued improvement in financial performance and the surplus of the general state budget during the first quarter of this year are positive factors that guarantee the achievement of the medium-term financial balance plan for the period 2020-2024, in particular in the use of the surplus. reduce public debt levels and stimulate economic recovery and increased spending on priority development projects.
Dr. Nasser bin Rashid Al Maawali pointed out that the opportunities for overall economic recovery have improved, especially for the sectors most affected by the pandemic and, on the other hand, the general state budget surplus of 357 million. of OMR, compared to a deficit of OMR 751 million in the same period of 2021 will help inject liquidity to support the private sector and revive economic and commercial activity. During the first quarter of the year, the Ministry of Finance disbursed approximately OMR 146.4 million to the private sector.
He stressed that in the short term, economic policy makers will be able to move between broader options to develop the basic economic infrastructure needed to stimulate private investment, accelerate the implementation of major development projects and create the optimal environment to attract more foreign direct investment.
He indicated that the increase in capital expenditure by about 131% in the first quarter of this year to OMR 150 million, compared to the first quarter of last year, directly contributes to improving the productive activities. , increase economic growth rates and provide employment opportunities for citizens.
The financial surplus also contributed to facilitating the current expenditure of ministries and civil services as well as reducing the burden of public debt servicing. Expenditure on interest clause on loans amounted to approximately OMR 291 million and OMR 50 million was spent on debt repayment.
The Undersecretary of the Ministry of Economy added: “The current level of oil prices and the increase in production in the Sultanate of Oman have helped accelerate the economic recovery, with production averaging 1,025 barrels per day in the first quarter of this year, which will support growth rates in the oil sector.The latest estimates from the International Monetary Fund indicate that GDP growth will be around 5.6% this year, supported by the growth of the oil sector and non-oil sector by around 8% and 2%, respectively, and this is the highest expected growth rate among the GCC countries.
He also pointed out that the Ministry of Economy is constantly monitoring the repercussions of the global situation and its economic impacts, as well as the development of energy markets and the expectations that accompany this development, and mainly aims to take expansionary and flexible economic policy options capable of coping with these variables and focused primarily on stimulating growth in economic diversification sectors as a guarantor of stability and continuity of economic growth and mitigating expected economic risks .
He said the remarkable improvement in financial performance and the various measures taken by the Sultanate of Oman to improve the business environment have prompted international credit rating institutions such as Standard & Poor’s (S&P) and Moody’s to improve their future prospects for the Sultanate, which is a positive factor that helps to attract more foreign investment. He stressed that the government will continue its public finance reform approach, as well as its efforts to diversify the economic base and widen the scope of private sector participation to lead the locomotive of economic growth.
Dr. Nasser bin Rashid Al Maawali stressed that the economy of the Sultanate of Oman has a solid foundation to overcome the economic repercussions of the COVID pandemic, register remarkable economic growth and continue the process of construction and development led by His Majesty Sultan Haitham. bin Tarik to move towards a better future.
For his part, Dr. Khalid bin Said Al Ameri, Chairman of the Board of the Economic Society of Oman, said that the positive indicators achieved by the general budget of the Sultanate of Oman in the first quarter of this year are mainly due to growth in net oil revenue to OMR 1.56 billion, or 70.2%. He explained that increased revenue and exchange control led to an estimated financial surplus of OMR 357 million.
He added, in a statement to the Oman News Agency, that achieving a financial surplus in the general state budget is a positive indicator and puts the Sultanate of Oman in a good position to legalize or limit the State’s public debt and contribute to the payment of State indebtedness through the public debt service item of the budget allocated to the payment of interest on loans. Moreover, the Sultanate will not have to contract loans to repay its budget deficit.
He pointed out that the improvement in financial indicators and a decrease in public debt risks with the achievement of financial surpluses reflected positively on the credit rating of the Sultanate of Oman by rating agencies, adding that Fitch agencies , Moody’s and Standard & Poor’s had revised their outlook on the Sultanate of Oman’s rating.
Dr. Al Ameri explained that the payment of more than 146 million OMR as owed to the private sector at the end of the first quarter of this year, gives a strong boost to liquidity in the market in particular and to the economic cycle. in general, emphasizing that the orientation of the financial surplus to stimulate economic recovery and increase spending on priority projects, debt reduction and management of its risks, push the economic, investment and market aspects finance towards recovery.
On the other hand, Mustafa bin Ahmed Salman, CEO of United Securities LLC, said that the budget had positive results for the first quarter, driven by improving oil and gas prices, and this performance would carry over directly on the positive future. outlook for the general economy.
In a statement to the Oman News Agency, he said that the Sultanate of Oman is making efforts to reduce public debt and restructure debt, which will have an impact on improving credit ratings. in global markets, reducing the cost of debt and restructuring loans, and will be a major factor in attracting foreign investors.
He pointed out that the economic improvement will reflect positively on the level of confidence in the local markets and the Muscat Stock Exchange, as the valuations of local companies are at attractive levels. Thus, the strength of the general factors will have a role to play in convincing investors of the stability of the surrounding factors, and thus will show the value and quality of companies listed on the stock exchange.
He explained that this economic improvement will have a direct impact on improving the living conditions of citizens, and social spending will increase, in addition to additional spending for public development, especially on infrastructure.
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