An International Monetary Fund (IMF) mission comprising Mr. Ananthakrishnan Prasad and Ms. Mariana Colacelli visited Oman to hold a two-day workshop with staff of the Central Bank of Oman (CBO) on May 7-8, 2014, on Oman’s medium-term macroeconomic framework. This workshop was designed to build medium-term projections for Oman’s economy.

Oman’s economic performance was robust in 2013. Real nonydrocarbon sector is estimated to have grown by 5 ½ percent in 2013 and is projected to remain so in 2014. Fiscal and external sectors are estimated to have posted surpluses in 2013 at over 5½ percent and around 10 percent of GDP, respectively. Fiscal and external surpluses are expected as well in 2014, though of lower magnitude. The public investment program is expected to help maintain nonhydrocarbon growth around 5.0 percent over the medium term. The banking system remains profitable and stable, with an average return on assets of 1.6 percent, return of equity of 11 percent, capital adequacy ratio of 16.2 percent, and gross nonperforming loans of 2.1 percent as of December 2013.

This collaborative workshop is a step to support the authorities’ upcoming reform agenda that includes strengthening Oman’s public finances through a targeted reduction in energy subsidies and introducing a medium-term budget framework to help anchor fiscal policy and support macroeconomic stability.