Oman to establish new economic city with two free zones

Muscat, the corniche of Muttrah, the old town of Muscat, waterfront building. Oman will establish a new economic city and two economic free zones. Getty

Oman will establish a new economic city and two economic free zones, as the Sultanate seeks to boost its economy.

Oman's Sultan Haitham issued two royal decrees establishing the Khazaen Economic City in the Governorate of South Al Batina, while the second decree stipulated the establishment of two free zones within the Khazaen Economic City, Oman News Agency said on Monday.

The Khazaen Economic City will be supervised by the Public Authority for Special Economic Zones and Free Zones, it said.

According to the decree, Oman Logistics Company will be the operating party of Khazaen Economic City and the two free zones set up therein.

It also added that Khazaen Economic City Company shall be the developer of Khazaen Economic City and the two free zones set up therein.

Oman's economy is on a strong footing as it presses forward with its economic diversification initiatives, strengthened by favourable oil prices and fiscal reforms at a time when inflation remains contained, the International Monetary Fund said last month.

The largest non-Opec producer in the Middle East, Oman expects a budget deficit of 1.3 billion rials this year, or 3 per cent of its economy, after achieving a surplus of 1.14 billion rials for 2022, the Ministry of Finance said in January.

The Gulf nation launched a three-year fiscal stability programme in October to add to the momentum of the sultanate’s economic recovery from the pandemic-driven slowdown and support the development of the country’s financial sector.

The sultanate also signed agreements with its GCC neighbours to boost its economy and create jobs, including a $3 billion railway network linking Oman with the UAE and a $320 million infrastructure development project with the Saudi Fund for Development.

In April, Fitch Ratings revised its outlook for Oman from stable to positive and affirmed its “BB” rating as the country’s finances strengthened on the back of higher oil revenue and a fall in public debt.

The positive outlook reflected the view that the government is committed to fiscal consolidation, the rating agency said at the time.