1. Market Research
  2. > Energy & Environment
  3. > Energy
  4. > Oil and Gas Energy Market Trends
  5. > Oman and Yemen Country Risk Report Q1 2017

Oman and Yemen Country Risk Report Q1 2017

  • October 2016
  • -
  • Business Monitor International
  • -
  • 55 pages

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 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. Core Views

We expect the formation of a fragile federalised state in Yemen. This will take time, and the country will remain fragmented over the coming years. Political and social instability will continue for many years. The divisions between the internationally recognised government and the Houthi rebels shows no signs of being solved. The economic outlook is bleak, with growth remaining negative over the next three years. Our core scenario sees business activity continuing to be negatively affected by civil unrest, while persistent attacks on the country's hydrocarbon infrastructure will weigh on exports.

Table Of Contents

Oman and Yemen Country Risk Report Q1 2017
BMI Indices - Brief Methodology.............................................................................................................................. 5
BMI Risk Index - Oman...................................................................................................................................................................6
BMI Risk Index - Yemen.................................................................................................................................................................7
BMI Index League Tables...............................................................................................................................................................9
Executive Summary - Oman.................................................................................................................. 11
Core Views.....................................................................................................................................................................................11
Chapter 1.1: Economic Outlook - Oman............................................................................................... 13
SWOT Analysis......................................................................................................................................................... 13
Economic Growth Outlook...................................................................................................................................... 14
No Escaping Slower Growth........................................................................................................................................................14
Oman's economy will become more affected by lower oil prices from H216 onward, as both monetary conditions and fiscal policy tighten.
GDP By Expenditure Outlook.................................................................................................................................. 15
TABLE:GDP GROWTH FORECASTS.....................................................................................................................................................................15
TABLE: GOVERNMENT CONSUMPTION FORECASTS.......................................................................................................................................15
TABLE: PRIVATE CONSUMPTION FORECASTS..................................................................................................................................................16
TABLE: FIXED INVESTMENT FORECASTS..........................................................................................................................................................16
TABLE: NET EXPORTS FORECASTS....................................................................................................................................................................16
TABLE: SELECTED INFRASTRUCTURE AND INDUSTRIAL PROJECTS............................................................................................................16
Fiscal Policy And Public Debt Outlook.................................................................................................................. 17
Debt Issuance And Privatisations To Fund Fiscal Deficits.......................................................................................................17
Oman will rely primarily on debt issuance to cover its large fiscal deficits over the coming years. We forecast a budget deficit of 16.3% of
GDP in 2016, which will staying in double digits until 2019.
Structural Fiscal Position........................................................................................................................................ 18
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES............................................................................................................................. 19
TABLE: FISCAL AND PUBLIC DEBT FORECASTS............................................................................................................................................... 19
Monetary Policy........................................................................................................................................................ 20
Slow Pick-Up In Inflation...............................................................................................................................................................20
Inflation in Oman will remain subdued by historical standards as low commodity prices, the strength of the US dollar and weaker
economic activity retrain price pressures.
Monetary Policy Framework.................................................................................................................................... 21
TABLE: MONETARY POLICY FORECASTS..........................................................................................................................................................21
Chapter 1.2: 10-Year Forecast - Oman................................................................................................. 23
The Omani Economy To 2025................................................................................................................................. 23
The Next Episode: Shifting Away From Oil.................................................................................................................................23
Declining oil production and weak global energy prices will weigh on growth over the coming decade. Although Oman is diversifying its
economy, it needs to do more to reduce its energy dependence and develop self-sustaining growth outside of the hydrocarbons and
energy-intensive sectors.
TABLE: LONG-TERM MACROECONOMIC FORECASTS..................................................................................................................................... 23
Chapter 1.3: Political Outlook - Oman.................................................................................................. 25
SWOT Analysis......................................................................................................................................................... 25
Domestic Politics..................................................................................................................................................... 26
Caught In The Middle Of Regional Tensions..............................................................................................................................26
The escalating tensions between Iran and Saudi Arabia threaten to undermine Oman's long-held position of regional neutrality.
TABLE: POLITICAL OVERVIEW.............................................................................................................................................................................26
Long-Term Political Outlook................................................................................................................................... 27
Royal Succession: Who Is Next In Line?....................................................................................................................................27
Royal succession is the major question regarding Oman's political future, although demographic change and regional instability also
pose challenges.
TABLE: FRONTRUNNERS FOR THE SUCCESSION............................................................................................................................................28
Chapter 1.4: Operational Risk - Oman.................................................................................................. 31
SWOT Analysis......................................................................................................................................................... 31
Operational Risk....................................................................................................................................................... 32
TABLE: OPERATIONAL RISK................................................................................................................................................................................. 32
Business Crime........................................................................................................................................................ 33
TABLE: BUSINESS RESPONSE TO RISK IN OMAN............................................................................................................................................. 34
Government Intervention......................................................................................................................................... 35
TABLE: BUSINESS TAXES..................................................................................................................................................................................... 36
TABLE: PERSONAL INCOME TAX......................................................................................................................................................................... 37
Executive Summary - Yemen.................................................................................................................39
Core Views.....................................................................................................................................................................................39
Key Risks.......................................................................................................................................................................................39
Chapter 2.1: Economic Outlook - Yemen............................................................................................. 41
SWOT Analysis......................................................................................................................................................... 41
Economic Growth Outlook...................................................................................................................................... 42
No End In Sight For Economic Recession..................................................................................................................................42
With little prospect for a rapid resolution of the conflict, Yemen's economy will continue to shrink over the coming quarters. The country's
economic woes will be exacerbated by low oil prices and a structurally declining oil production.
Chapter 2.2: 10-Year Forecast - Yemen................................................................................................ 43
The Yemeni Economy To 2025................................................................................................................................ 43
Bleak Outlook As Energy Exports Contract...............................................................................................................................43
Declining oil production, the ongoing depletion of water resources and persistent security risks cloud Yemen's macroeconomic outlook
over the 2016-2025 period.
TABLE: LONG-TERM MACROECONOMIC FORECASTS..................................................................................................................................... 43
Chapter 2.3: Political Outlook - Yemen................................................................................................ 45
SWOT Analysis......................................................................................................................................................... 45
Domestic Politics..................................................................................................................................................... 46
Peace Deal, Still On The Cards, To Bring Little Improvement..................................................................................................46
Yemen will remain mired in political violence and economic crisis regardless of a peace agreement being signed between Houthi rebels
and the Saudi-backed government.
TABLE: POLITICAL OVERVIEW............................................................................................................................................................................. 46
Long-Term Political Outlook................................................................................................................................... 48
Little Scope For A Unified, Functioning Yemen.........................................................................................................................48
Over the coming decade a fragile federalised state will emerge in Yemen, with the government nevertheless de facto-controlling little of
the country. While not our core view, we flag significant risks of a de-facto break-up of the state, as was the case before 1990.
Chapter 3: BMI Global Macro Outlook................................................................................................... 51
Global Macro Outlook.............................................................................................................................................. 51
Broad Recovery But Three Notes Of Caution.............................................................................................................................51
TABLE: GLOBAL FORECASTS, 2015-2020...........................................................................................................................................................51
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %....................................................................................................................................52
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %................................................................................................................................... 53
TABLE: OMAN - MACROECONOMIC DATA and FORECASTS...............................................................................................................................55
TABLE: YEMEN - MACROECONOMIC DATA and FORECASTS.............................................................................................................................55

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Veronica

+1 718 514 2762

Purchase Reports From Reputable Market Research Publishers
Crude Oil Flow Improvers Market by Type, Application, Supply Mode - Global Forecast to 2021

Crude Oil Flow Improvers Market by Type, Application, Supply Mode - Global Forecast to 2021

  • $ 12000
  • Industry report
  • September 2016
  • by MarketsandMarkets

“Rise in crude oil production worldwide drives the COFI market” The global market size of COFI is estimated to reach USD 1.73 billion by 2021 from 1.32 billion in 2016, at a CAGR of 5.5%. Excessive ...

Filter Bags Market - Global Industry, Size, Share, Growth, Trends and Forecast 2016 - 2024

Filter Bags Market - Global Industry, Size, Share, Growth, Trends and Forecast 2016 - 2024

  • $ 7000
  • Industry report
  • September 2016
  • by Transparency Market Research

The filter bags market report provides an in-depth analysis of the global filter bag market for the period 2014 – 2024, wherein 2015 is the base year and the years from 2016 to 2024 is the forecast period. ...


ref:plp2016

Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.