To read the full version of this content please select one of the options below:

The next Omani sultan will face an economic crisis

Tuesday, May 16, 2017

Significance

The ratings agency said the change reflected the erosion of Oman’s foreign reserves in a context of low oil prices. Fears are rising over the country's longer-term economic future, as structural problems -- such as limited oil reserves and poor progress with diversification and fiscal reform -- intersect with political uncertainties over the succession process.

Impacts

  • Oman will seek new investments and loans from China -- a principal importer of Omani oil.
  • Large deposits by neighbouring countries in Oman’s central bank could threaten financial stability if suddenly withdrawn.
  • The external Oman Investment Fund may absorb the State General Reserve Fund, on which the government has drawn down heavily.
Expert Briefings Powered by Oxford Analytica
Stay up to date
Sign up to the Expert Daily Briefings email alert and receive up-to-the-minute analysis of global events as they happen.
*If your university does not have access to Expert Briefings, visit our information page to find out more.