Oman Country Risk Report Q1 2020
Much like in the rest of the Gulf Cooperation Council, our shift to a bearish oil price outlook for the next five years will have a negative impact on the Omani economy.
The budget will suffer most noticeably with contracting oil revenue growth, meaning that the fiscal deficit as a share of GDP will be wider in 2019 and 2020 than the level recorded in May.
The government will most likely restrain spending growth in response, negatively affecting economic growth. Weaker capital spending in particular will have negative knock-on effects on the economy, and we expect real GDP growth to decelerate in 2019 and 2020.
Similar to the budget deficit, the current account deficit will remain fairly wide on the back of weaker oil prices, although a contraction in imports will temper this to some extent.
Oman's labour force nationalisation efforts will likely intensify over the coming years as the government seeks to reduce the impact of fiscal cutbacks on the citizen population.
The eventual succession of Sultan Qaboos bin Said al-Said, who exercises virtually absolute power over Oman, could result in political and economic uncertainty given that there is little uncertainty on who will succeed him.
A global recession, while not our core view, could exert further downside pressure on oil prices and raise government borrowing costs, with negative implications for medium-term economic growth and macroeconomic stability.
- Executive Summary
- Core Views
- Key Risks
- Country Risk Summary
- Economic Risk Index
- Political Risk Index
- Economic – SWOT Analysis
- Political – SWOT Analysis
- Economic Outlook
- Economic Growth Outlook
- Poor Outlook For Growth
- GDP By Expenditure Outlook
- TABLE: GDP GROWTH FORECASTS
- TABLE: GOVERNMENT CONSUMPTION FORECASTS
- TABLE: PRIVATE CONSUMPTION FORECASTS
- TABLE: FIXED INVESTMENT FORECASTS
- TABLE: NET EXPORTS FORECASTS
- External Trade And Investment Outlook
- Import Slump To Support Current Account Balance
- Outlook On External Position
- TABLE: CURRENT ACCOUNT BALANCE FORECASTS
- Monetary Policy Framework
- TABLE: MONETARY POLICY FORECASTS
- Fiscal Policy And Public Debt Outlook
- Fiscal Deficit To Widen Again
- Structural Fiscal Position
- TABLE: FISCAL AND PUBLIC DEBT FORECASTS
- 10-Year Forecast
- The Omani Economy To 2028
- Diversification Drive Crucial To Long-Term Growth
- TABLE: LONG-TERM MACROECONOMIC FORECASTS
- THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.Oman Country Risk Q1 2020ContentsPolitical Outlook
- Domestic Politics
- GCC Labour Force Nationalisation Schemes Likely To Advance, But Not At 'All Costs'
- Long-Term Political Outlook
- Succession Question Clouds Political Future
- Operational Risk
- TABLE: OPERATIONAL RISK
- Economic Openness
- TABLE: TARIFF AND NON-TARIFF BARRIERS
- TABLE: FREE TRADE AGREEMENTS
- TABLE: FREE TRADE ZONES AND INVESTMENT INCENTIVES
- TABLE: BARRIERS TO FDI
- Utilities Network
- TABLE: ELECTRICITY RISKS
- TABLE: FUEL RISKS
- TABLE: TELECOMMUNICATIONS RISKS
- TABLE: WATER RISKS
- Global Macro Outlook
- Downside Revisions To Stabilise Somewhat, But Policy Risks Remain
- TABLE: GLOBAL MACROECONOMIC FORECASTS (2018-2023)
- TABLE: DEVELOPED MARKETS – REAL GDP GROWTH, % y-o-y
- TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
- Index Tables
- TABLE: OMAN – MACROECONOMIC DATA AND FORECASTS