MUSCAT: In a remarkable turn of events, Standard Chartered's latest Global Focus report for Q3 2024 highlights promising developments for Oman, the sole Gulf Cooperation Council (GCC) economy to witness a significant reduction in its fiscal breakeven oil price, now at $65 per barrel, down from $80 in 2021. In remarks to Oman Observer, Hussain al Yafai, CEO of Standard Chartered Oman, said, “Oman's economic strategy is yielding impressive results, particularly in its non-oil sectors.”
This substantial decrease has been pivotal in the Sultanate of Oman's consecutive rating upgrades, moving from B+ in 2021 to BB+. Standard Chartered anticipates that continued efforts in debt reduction, improved fiscal performance, and a steadfast commitment to medium-term reforms could soon restore Oman's investment-grade rating.
Public debt is projected to decline to 34% of gross domestic product (GDP) by the end of 2024, bolstered by sustained twin surpluses. This financial stability could lead to opportunities for refinancing, thereby invigorating the domestic economy and enhancing the Central Bank of Oman’s foreign exchange reserves.
Economic activity in Oman is on the rise, driven by investment initiatives from Future Fund Oman. Unlike its GCC counterparts, Oman is less impacted by OPEC+ oil production cuts thanks to its burgeoning natural gas output. The non-oil sector, which makes up about 70% of real GDP, is expected to grow from 2.4% in 2023 to 3.0% in 2024, with significant contributions from tourism, manufacturing, and trade.
Hussain al Yafai added, “The projected growth to 3.0% in 2024 for these sectors demonstrates the success of Oman’s diversification efforts. The country’s expanding natural gas output provides a unique advantage, offering greater economic stability. With the Future Fund driving investment initiatives, the Sultanate of Oman is well-positioned for sustained economic growth and increased attractiveness to international investors.”
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