The World Bank expected that the Sultanate’s gross domestic product (GDP) to grow by 2 percent in 2021 compared to a contraction of 4 percent in 2020 due to the implications of Covid-19 pandemic and low oil prices.
In its June report (Global Economic Prospects), the World Bank pointed out that the Sultanate’s GDP growth in 2021 will be the highest during the past five years. The Sultanate recorded a growth of 0.3 percent in 2017, 1.8 percent in 2018, and 0.5 percent in 2019.
The Bank expected that the economic activity in the MENA region to shrink by 4.2 percent in 2020, as a result of the pandemic and oil market developments. The Bank explained that Covid-19 pandemic and the efforts to contain it weakened the economic activity in the region in the short term. The increasing reluctance of investors to bear risks led to intensified bouts of financial market volatility and the sharp decline in oil prices and the demand for its exports in global markets led to shrinking exports of oil-producing countries. This had repercussions on the non-oil sectors while these challenges were exacerbated by several long-standing structural imbalances.