MUSCAT: Belgian Export Credit Agency, Credino, praised the Oman’s strong commitment to implementing economic reforms, boosting the chances of economic recovery.
According to a new report published on its website, the public debt of the Sultanate of Oman has begun to improve since 2021, against the background of the rise in oil and gas prices, and efforts to control financial conditions.
Oil prices are currently exceeding the financial breakeven price of oil in the Sultanate of Oman, which is estimated at $73 per barrel for 2022, improving the country’s financial prospects, the report revealed.
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In addition, in 2020, Oman had launched a medium-term fiscal plan, aimed at reducing public debt. The plan included reducing public spending and reforms aimed at increasing non-hydrocarbon public revenues such as introducing a value-added tax (VAT).
It stated that the overall fiscal balance deficit shrank significantly in 2021, to 2.5% of GDP from 5.6% in 2019, before the COVID-19 shock.
In 2022, the initial fiscal balance is expected to be 7.2% of GDP with a total fiscal balance of 5.6% of GDP, the first surplus since 2013.
Public debt levels are on a downward trend, and are expected to drop significantly in 2022 from 65% of GDP in 2021, to 44% of GDP, backed by the government’s commitment to using oil revenues to reduce public debt levels.
The report has emphasised that under conditions of ongoing fiscal reform and high oil prices, public debt levels are expected to fall to 28% of GDP by 2025.
