Oman French Association discusses economic outlook

MUSCAT: Taxation, project finance and diversification for a sustainable future were discussed at the seminar titled ‘Economic Outlook 2018’ held by the Omani French Association (OFA) on Tuesday. The seminar is part of a series of meetings organised by OFA on technology and economy of the Sultanate. Speakers at the seminar laid out strategies and analysis on government policies up till now and for the future.

“Oman like a lot of GCC countries have been improving their economy by diversifying but another important aspect is diversifying the revenues where things like taxation will be crucial. Taxes like value added tax (VAT) are very efficiently implemented and bring in a good amount of revenues. This is a very good first step to diversifying,” Amine Jaoui, Head of Business Development at Societe Generale said.

Jaoui highlighted that although debt to gross domestic product (GDP) ratio for most GCC countries including Oman is rising, it is not necessarily a bad thing considering OECD countries have breached the 100 per cent debt to GDP ratio. According to credit rating agencies, Oman’s debt to GDP ratio will rise to 50 per cent in 2019.

The speakers also discussed Oman’s improving performance with falling deficit that in the first 9 months has dropped to OMR3 billion when compared to 4.5 billion last year.

“There are measures by the government on curtailing rising deficit and declining revenues. Expenditure rationalisation has seen break-even oil prices drop to below $80 a barrel. Moreover foreign debt issuance is also been done in a prudent manner,” Dr. Caroline Bolle, Group Head of Investment Banking at Bank Muscat said.

She added that capital markets in Oman were fairly new and were missing some of the biggest companies like ones from oil and gas and manufacturing sector. She, however, said that with the introduction of REITs, markets will be able to grow to maturity soon.

According to Jaoui, the sovereign downgrading of Oman by rating agencies was not an accurate assessment. “It is the most punishing for a country that is not at that kind of risk,” he said. Full story @ timesofoman.com/business