Sultanate’s debt to GDP remains low

Amid widening of Oman’s fiscal gap and rationalisation of government spending, the current level of debt to GDP ratio remains relatively low.

Preliminary national accounts data from the Central Bank of Oman (CBO) indicate the nominal GDP declined by 9 per cent during the first nine months of 2016 compared with the same period last year.

The decline was reflected primarily in the petroleum sector with a fall of 29.4 per cent and a marginal drop of 0.2 per cent in the non-petroleum sector.

Oman crude oil registered an average price of $39.3 per barrel during January-November 2016 compared with $57.4 per barrel in the same period last year.

However, the average annual inflation for the year remained moderate at 1.1 per cent.

“While manufacturing and wholesale and retail trade were adversely affected, value addition showed positive growth mainly in construction, agriculture and fishing as well as in real estate services,” the apex bank said in a report.

The overall GDP value of the agriculture and fisheries sectors has increased with an average growth rate of 7.4 per cent.

“The fiscal gap widened during the year and the government took several measures to augment non-oil revenues and rationalised government spending, apart from stepping up external borrowings, given that the current level of debt to GDP ratio remains relatively low,” the report said.

Oman’s 2017 budget deficit is estimated at about RO 3 billion, which is 35 per cent of total revenues, and 12 per cent of GDP.