Oman's macroeconomic performance remained strong in 2002, a trend that is expected to continue in the current year, reported the International Monetary Fund (IMF) in its recent Article IV consultation with the Sultanate.
Concluded on October 6, 2003, the IMF Executive Board’s review forecasts positive developments in Oman due to sound policies, relatively high crude oil prices, rising government consumption and investment, the LNG development, and an improved business climate, reported a Public Information Notice (PIN).
While crude oil output declined in the Sultanate, growth in the non-hydrocarbon sector has remained robust, and the fiscal and external current account balances have recorded surpluses. In addition, the government has reduced its debt significantly and accumulated foreign assets.
In 2002, non-hydrocarbon gross domestic product (GDP) growth in Oman accelerated to six percent, underpinned by rising public consumption and investment. However, aggregate real GDP grew by only two percent, as oil output fell by 6.2 percent, mostly owing to aging oil fields. In line with declining import prices, the consumer price index fell by about one percent in 2002, the third consecutive year of a small negative change.
According to the PIN, IMF Directors consider that Oman's medium-term growth prospects remain favorable, underpinned by higher public and private investment in gas-based industries, infrastructure, and tourism, as well as further expansion in LNG production and exports. However, the fiscal position could deteriorate as a result of lower crude oil prices, a slow recovery in crude oil output, and increased oil-related government investment.
Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies.
On return to IMF headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and a summary is transmitted to the country's authorities. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
