The IMF projects a recovery in Oman's economic growth to 2.7% in 2024

The banking industry is still strong, and profitability has increased from epidemic lows.

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In its last report to the Sultanate on Monday, the International Monetary Fund (IMF) predicted that Oman's economy will increase by 2.7% in 2024 but only by 1.3% in 2023.

The predictions take into account OPEC+'s cuts to oil output, a slowdown in global economic activity, tighter financial conditions, and moderate growth in the non-hydrocarbon sector as a result of improving but still tepid construction activity.

In 2022, the Gulf country's real GDP increased by 4.3 percent, largely due to a robust rise of the hydrocarbon sector.

However, it is anticipated that non-hydrocarbon growth will increase from 1.2 percent in 2022 to 2 percent in 2023 and 2.5 percent in 2024.

Due to lower food inflation and a stronger US currency, headline inflation decreased from 2.8 percent in 2022 to 1.1 percent by April 2023.

The banking industry is still healthy, according to the IMF, and profitability has increased from pandemic lows. Banks exhibit large capital and liquidity reserves. While credit to the private sector keeps growing, asset quality remains high.

The statement stated that "the near- to medium-term outlook is favourable and risks to the outlook are balanced."

The Duqm refinery project's faster production, another spike in oil prices, the acceleration of the Vision 2040 reform initiatives, and an increase in foreign direct investments from regional partners will all positively impact growth and fiscal and external positions.

The analysis identified three main threats to the outlook: pressure to spend the oil windfall, a sudden reduction in oil price brought on by a severe and lengthy global economic slowdown, and lower demand for hydrocarbons as a result of a quicker than anticipated global energy shift.