Oman is finding way out of its budget distress without a bailout

Oman is finding way out of its budget distress without a bailout

Cash-strapped Oman is getting a shot at redemption with investors without recourse to a bailout from wealthier neighbours.

A year after the sultanate's bonds approached distressed territory and its government discussed the possibility of financial aid from other members of the Gulf Cooperation Council, it's following through on a turnaround plan that enables it to go it alone, according to JPMorgan Chase & Co.

“This time around it's not about GCC support,” Hani Deaibes, the U.S. bank's head of debt capital markets for the Middle East and North Africa, said in a phone interview from Dubai. “It's about Oman's own strategy and the implementation” of its fiscal adjustment plan known as Tawazun, he said.

Oman's government is looking into borrowing that will cover 73% of the country's OR2.2bn shortfall

The sultanate has signaled a resolve to improve fiscal discipline with plans to start taxing incomes of wealthy individuals in 2022 – breaking a regional taboo – introducing a delayed value-added tax in April and paring state subsidies on water and electricity.

The International Monetary Fund now expects authorities to run a budget deficit of only 5.4 percent of gross domestic product this year, less than a third its shortfall in 2020. The IMF's outlook, published last month, pencils in