Oman’s ban on commercial activity will begin today and continue until May 15. The restrictions are one of many that
Oman’s ban on commercial activity will begin today and continue until May 15.
The restrictions are one of many that will attempt to halt the spread of COVID-19 over the Eid-al-Fitr holiday. The Supreme Committee of Combatting Coronavirus has also instated a curfew from 7 PM to 4 AM and banned holiday prayers and gatherings.
Oman’s economy was hit hard by the pandemic, shrinking 6.4% in 2020. Travel restrictions combined with low oil prices led the oil market, which makes up 30% of GDP, to crash. Sultan Haitham bin Tariq Al Said’s recovery reforms have focused on austerity and diversification. This includes tax exemptions for non-oil companies and reduced income tax for small and medium sized businesses.
Expect this week’s lockdown to have little effect on Oman’s short-term economic prospects. Recovery will depend primarily on vaccination rates, travel restrictions, increasing global demand for oil and tourism revenues. Medium- to long-term economic recovery is also likely. Haitham has shown willingness to enact the substantial reforms needed: cutting government spending and increasing tax revenues. His Vision 2040 reorganized Muscat’s government and improved investment conditions in diverse sectors. If the sultan succeeds, a diversified economy will likely focus on tourism and logistics.
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