Oman has asked the International Monetary Fund to provide technical assistance to help the country develop a medium-term debt strategy and strengthen its fiscal framework, the IMF said.
The Gulf oil producer has been hit hard by the twin shock of lower oil prices and the coronavirus crisis last year.
Real gross domestic product shrank 2.8% and the state budget deficit ballooned to 19.3% of GDP due to lower oil revenue and the economic downturn, the IMF said in a statement on Tuesday.
Oman launched austerity measures last year which helped it maintain access to the international debt markets ahead of debt redemptions worth about $11 billion this year and next.
Since the oil price crash in 2014, its debt to GDP ratio has leapt from about 15% in 2015 to 80% last year, while plans to diversify the economy have lagged.
"The authorities have requested IMF technical assistance to help develop a medium-term debt strategy to guide the government’s borrowing program and provide more predictability to the financial system," the IMF said.
Oman has asked for technical assistance also "to help strengthen the medium-term fiscal framework," it said.
The IMF expects Oman's economy to rebound and grow by 2.5% this year thanks to a projected increase in hydrocarbon production as well as the impact of the vaccine rollout.
State finances are slated to improve owing to rising hydrocarbon revenue and Oman's fiscal reforms, with the budget deficit likely to shrink to 2.4% of GDP this year and then move to a surplus in the medium term, said the fund.
Because of the growing role of state-owned enterprises, the IMF recommended the development of a "sovereign asset liability management framework" to get a better picture of the sustainability of the public sector beyond the central government budget.
