Oman and Yemen Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

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  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
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Oman and Yemen Country Risk Report
Product Price
$1,195.00

Core Views

  • Uncertainty over the health of Sultan Qaboos bin Said al-Said, who has governed Oman since 1970, is bringing the succession question to the fore. We see major risks in the succession process. Governance is set to become more unpredictable in the future, and the Omani political system - with the Sultan enjoying all-encompassing powers - is largely unsustainable in its current form.

  • Tightening liquidity conditions, public spending cuts, and weak export growth will present headwinds for Oman's economy and corporate sector over 2016. Growth will weaken to 2.3% in real terms, compared to the annualised rate of 3.5% recorded between 2010 and 2014.

  • The fall in oil prices will leave Oman posting budget and current account deficits for years. While the country can rely on the debt and loan markets for the time being, the need to implement new taxes and curb spending will test the regime's popularity.

  • Oman is well positioned to benefit from improvements in Iran's relations with the West. The relaxation of the international sanctions regime on Iran will provide an upside factor for Omani exports and investment inflows.

  • The escalating tensions between Iran and Saudi Arabia threaten to undermine Oman's long held position of regional neutrality. Although the country's careful balance between Tehran and the rest of the Gulf is likely to be maintained as long as Sultan Qaboos bin Said is in power, his successor could struggle to navigate the same middle ground.

  • Government efforts to attract Omani nationals to the private sector (known as 'Omanisation') will continue to meet with limited success. We expect the government to adopt a more flexible approach over the coming years to accommodate the concerns of companies amidst a weakening economy. In the long term, improvements in education will be a more effective driver of job creation than strict 'Omanisation' targets.

  • Dropping the rial's peg to the US dollar would provide little benefit to the Omani economy, and is not our core scenario. Nevertheless, the risk of a forced devaluation will grow throughout the coming years, given the deterioration in Oman's fiscal and external dynamics and the country's low foreign reserve buffers.

Macroeconomic Forecasts (Oman 2014-2017)
Indicator 2014 2015e 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y 2.9 3.2 2.3 2.5
Nominal GDP, USDbn 81.7 73.3 75.2 77.8
Consumer price inflation, % y-o-y, eop 0.8 -0.1 1.0 2.0
Exchange rate OMR/USD, eop 0.39 0.38 0.38 0.38
Budget balance, % of GDP -3.4 -17.8 -16.3 -12.8
Current account balance, % of GDP 5.0 -13.5 -13.2 -8.2
BMI Indices - Brief Methodology
5
BMI Index - Oman
6
BMI Index - Yemen
7
BMI Index League Tables
9
Executive Summary - Oman
11
Core Views
11
Chapter 1
13
SWOT Analysis
13
Economic Growth Outlook
14
No Escaping Slower Growth
14
GDP By Expenditure Outlook
15
TABLE: GDP GROWTH FORECASTS
15
TABLE: GOVERNMENT CONSUMPTION FORECASTS
15
TABLE: PRIVATE CONSUMPTION FORECASTS
15
TABLE: SELECTED INFRASTRUCTURE AND INDUSTRIAL PROJECTS
16
TABLE: FIXED INVESTMENT FORECASTS
16
TABLE: NET EXPORTS FORECASTS
16
Fiscal Policy And Public Debt Outlook
17
Debt Reliance To Cover Fiscal Deficits
17
Structural Fiscal Position
18
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
19
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
19
Monetary Policy
20
Rising Rates In Coming Months To Dampen Inflation
20
Monetary Policy Framework
21
TABLE: MONETARY POLICY FORECASTS
20
Chapter 1
23
The Omani Economy To 2025
23
The Next Episode: Shifting Away From Oil
23
TABLE: LONG-TERM MACROECONOMIC FORECASTS
23
Chapter 1
25
SWOT Analysis
25
Domestic Politics
26
Balancing Act To Remain Mainstay Of Foreign Policy
26
TABLE: POLITICAL OVERVIEW
26
Long-Term Political Outlook
27
Royal Succession: Who Is Next In Line-
27
TABLE: FRONTRUNNERS FOR THE SUCCESSION
28
Chapter 1
31
SWOT Analysis
31
Operational Risk
32
TABLE: OPERATIONAL RISK
32
Market Size And Utilities
33
TABLE: MIDDLE EAST AND NORTH AFRICA - MARKET SIZE AND UTILITIES RISK
33
Labour Costs
38
TABLE: EMPLOYING WORKERS IN OMAN
38
Executive Summary - Yemen
43
Core Views
43
Key Risks
43
Chapter 2
45
SWOT Analysis
43
Economic Growth Outlook
44
Little Hope For Economic Recovery
44
TABLE: KEY ECONOMIC INDICATORS
44
External Trade And Investment Outlook
45
GCC Support To Prevent External Crisis
45
Chapter 2
53
The Yemeni Economy To 2025
47
Bleak Outlook As Energy Exports Contract
47
TABLE: LONG-TERM MACROECONOMIC FORECASTS
47
Chapter 2
55
SWOT Analysis
49
Domestic Politics
50
War Will Continue, Little Scope For Peace Agreement
50
TABLE: POLITICAL OVERVIEW
50
Long-Term Political Outlook
52
Little Scope For A Unified, Functioning Yemen
52
Chapter 3: BMI Global Macro Outlook
55
Global Macro Outlook
55
Brexit Risk Casts A Long Shadow
55
TABLE: GLOBAL ASSUMPTIONS
55
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
56
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
57
TABLE: OMAN - MACROECONOMIC DATA & FORECASTS
59
TABLE: YEMEN - MACROECONOMIC DATA & FORECASTS
59

Assess your risk exposure in Oman, Yemen with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Oman, Yemen with confidence.

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