Oman faces sizeable and persistent twin deficits and the prospect of a meagre growth outlook, while succession risk hangs over the sultanate.
Economic risk (HIGH): The drop in oil revenues as Oman stuck to the OPEC cuts pushed the fiscal and current account balances into the red, raising the risk it will have a net asset deficit by 2019. The rebound in oil prices will help restore the balance.
Political risk (MEDIUM): Oman has stuck to a neutral line in the row between Qatar while risking the ire of GCC states by building trade links with the emirate. Fears of a succession problem still exist.
Financial risk (LOW): Maintaining robust banking sector regulation and supervision will be important to bolster financial sector resilience in support of sustained economic growth in the wake of ratings downgrades of the banking sector.
Commercial risk (MEDIUM): Investors still face a number of obstacles to set up a business in Oman. It is envisaged that 100% foreign shareholding will be permitted in some sectors, such as industry and tourism under the Foreign Capital Investment Law.