OMAN'S ECONOMIC UPDATEExcerpt from The World Bank (October 2020)Similar to most economies all over the world, "theeconomy of Oman contracted sharply in 2020 amid theweakness of oil prices and the disruptions from COVID-19.Fiscal and external deficits will remain under immense straindue to prolonged low oil and gas prices, elevating public andexternal debt. Key risks to the outlook are prolonged low oilprices, which will induce high external borrowing needs, andlack of impetus for private sector job creation that does notdepend on government spending.The drop in oil prices and COVID-19 are placingunprecedented strain on Oman's economy. While no officialdata are available yet on the economy in 2020, preliminarydata issued by the authorities indicate that Oman's nominalGDP has contracted by 3.9% in Q1/2020 (y/y); non-oilactivities contracted by over 6%. Inflation has reachednegative territory with -0.4% (y/y) in Q2/2020 reflecting weakdomestic demand. The sharp drop in oil prices in 2020 willtake a heavy toll on public finances. Latest data reveals thattotal revenues declined by 22% in Q2/2020 (y/y), of which20% comes from a decline in oil receipts.The economy is projected to sharply contract by over 9%in 2020, owing to depressed global demand for oil and thepandemic hit to the non-oil sector. The new OPEC+ oil cutagreement is putting significant pressure on the hydrocarbonsector, which is expected to contract by over 12% this year.The non-oil economy also faces significant pressure amidongoing restrictions, with tourism and hotel sectors are amongthe hardest hit. If conditions ease, growth in Oman is projectedto gradually_pick up to an average of 4% in 2021-22, but veryback-loaded to 2022, partly due to a spike from the second phaseof the Khazzan field. Gas field development has been criticalto meet growing domestic and global demand, but it is not ona scale that is transformative in its own right. Inflation willlikely pick up to around 3% in 2021, reflecting the recovery ofdomestic demand and the introduction of VAT".TASK:Based on the background case above, answer the questionbelow.What appropriate monetary and fiscal policies can yourecommend to improve Oman's current economicsituation? Justify your answer. 100 wordYou may add research to your answers to substantiate yourreport.

Question

OMAN'S ECONOMIC UPDATEExcerpt from The World Bank (October 2020)Similar to most economies all over the world, &#34;theeconomy of Oman contracted sharply in 2020 amid theweakness of oil prices and the disruptions from COVID-19.Fiscal and external deficits will remain under immense straindue to prolonged low oil and gas prices, elevating public andexternal debt. Key risks to the outlook are prolonged low oilprices, which will induce high external borrowing needs, andlack of impetus for private sector job creation that does notdepend on government spending.The drop in oil prices and COVID-19 are placingunprecedented strain on Oman's economy. While no officialdata are available yet on the economy in 2020, preliminarydata issued by the authorities indicate that Oman's nominalGDP has contracted by 3.9% in Q1/2020 (y/y); non-oilactivities contracted by over 6%. Inflation has reachednegative territory with -0.4% (y/y) in Q2/2020 reflecting weakdomestic demand. The sharp drop in oil prices in 2020 willtake a heavy toll on public finances. Latest data reveals thattotal revenues declined by 22% in Q2/2020 (y/y), of which20% comes from a decline in oil receipts.The economy is projected to sharply contract by over 9%in 2020, owing to depressed global demand for oil and thepandemic hit to the non-oil sector. The new OPEC+ oil cutagreement is putting significant pressure on the hydrocarbonsector, which is expected to contract by over 12% this year.The non-oil economy also faces significant pressure amidongoing restrictions, with tourism and hotel sectors are amongthe hardest hit. If conditions ease, growth in Oman is projectedto gradually_pick up to an average of 4% in 2021-22, but veryback-loaded to 2022, partly due to a spike from the second phaseof the Khazzan field. Gas field development has been criticalto meet growing domestic and global demand, but it is not ona scale that is transformative in its own right. Inflation willlikely pick up to around 3% in 2021, reflecting the recovery ofdomestic demand and the introduction of VAT&#34;.TASK:Based on the background case above, answer the questionbelow.What appropriate monetary and fiscal policies can yourecommend to improve Oman's current economicsituation? Justify your answer. 100 wordYou may add research to your answers to substantiate yourreport.

Accepted Answer

Oman relatively has a healthy and stable economic condition. There unemployment rate has always been…

TASK: Based on the background case above, answer the question below. What appropriate monetary and fiscal policies can you recommend to improve Oman's current economic situation? Justify your answer. 100 word You may add research to your answers to substantiate your report.