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Hit by the massive slide in world oil prices since mid-2014, Oman is facing a double-digit fiscal deficit this year, a trend which could continue through 2020 if the government fails to introduce the necessary fiscal reforms, the IMF concluded in its latest Article IV consultation with the sultanate.
Increased spending, particularly in response to social demands over the four years to 2014, has pushed the country’s breakeven oil price to $108/B in 2014, the IMF says.
Based on an average oil price of $58.1/B for the year, the IMF has forecast Oman’s overall fiscal deficit at 14.8% of GDP in 2015, from a deficit of 1.5% in 2014, which is only expected to improve slightly to 11.6% in 2016, when the oil price assumption rises to $65.7/B. So far this year, the oil price as calculated by the IMF (an average of Brent, WTI and Dubai) has averaged $54.3/B.
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