20 Feb 2017
The gulf state has welcomed forecasts from financial experts who state that the country will experience significant growth in 2018.
According to a MENA report by the International Institute of Finance, 2018 will see Oman generate high GDP growth and low deficit as public sector spending is reinstated.
This is thanks to a mixture of a prudent budget, fiscal discipline and structural reforms as well as growing tourism and infrastructure within the Sultanate.
Chief economist of Oman Investment Fund, Fabio Scacciavillani said: “The reforms brought in by the government will certainly make the economy more efficient”.
Oman’s economy is heavily reliant on its oil production. In fact, according to the tradingeconomics website, the nation’s petroleum sector accounts for around 87% of budget revenues and 51% its GDP.
Indeed, Oman’s low level oil prices for 2016 saw the nation’s GDP decline rapidly. When compared to the first nine months of 2015, 2016 saw the country’s GDP fall 9% during the same period.
2016’s decline was primarily affected in the petroleum sector with a fall of 29.4% whereas there was a marginal drop of 0.2% in the non-petroleum sector.
However, the Sultanate is increasingly looking towards ways of speeding up the diversification of its economy via increased tourism, manufacturing, agricultural and mining sectors among others. Furthermore, Oman’s Budget for 2017 is directly tackling issues with the fall in oil prices.
Global financial experts agree that 2017’s outlook already looks set to be a whole lot better than last year, while the following year also looks to continue that momentum.
Mr Scacciavillani said: “The opening or upgrade of several infrastructural landmarks like the new airport, new roads, Duqm Port, etc in 2018 is also a big reason for economic growth as high performing sectors will be fully functional by then”.
Meanwhile, International Monetary Fund advisor and president of Nasser Saidi Associates, Nasser Saidi also welcomed the forecasts but cautioned that building projects must come online to help drive any recovery.
He said: “Oman still has a relatively low level of government debt to GDP and can use the debt markets to finance budget deficits without endangering fiscal sustainability. The criterion is to use debt for capacity building, infrastructure and productivity increasing investments that yield returns that can service the debt.”
Oman’s prospects recently received another boost after as a report by the Times of Oman online stated that around 81% of CEOs in the country are confident that their business will experience growth.
According to KPMG, 81% of 25 leading CEOs interviewed from ten different sectors in the Oman CEO outlook survey expect their organisation to grow in the next three years.
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