MUSCAT: Oman’s economy is forecast to recover in 2021, albeit at a moderate 2.5 per cent growth rate as a sizable infrastructure investment program gains momentum. Medium-term growth is projected to average 5.3 per cent over the forecast period, the World Bank said in its latest report.

The World Bank noted that the Gulf Cooperation Council (GCC) economies are expected to return to an aggregate growth of 2.2 per cent in 2021 following a year of economic distress. The COVID-19 pandemic and the decline in global oil demand and prices dealt the GCC countries a health crisis and a commodity market shock causing a GDP contraction 4.8 per cent in 2020.  

“While the GCC has done a lot in the last year to contain the effects of the pandemic on their economy, including procuring vaccinations early on, they must continue to reform their public sector finances,” said Issam Abousleiman, World Bank Regional Director of the GCC Countries.

“The region needs to strengthen their competition policies to harness the benefits of telecommunications and the digitalization of economic activity,” he added.

Fiscal deficits are projected to persist for most over the forecast period, however, but at narrower ratios to GDP in 2023 than during the economic downturn in 2020.