OBG praises Oman’s measures to tackle decline in oil prices

MUSCAT: Measures taken by the Sultanate to tackle the fallout of oil prices on the public budget have been praised by the London-based Oxford Business Group (OBG).

In a report published on its website, “Oman 2017,” OBG said that the oil prices slump led to the contraction of the Omani economy by 13.8 per cent and led to a deficit in the public budget. In an attempt to address this shortage, the Government has taken a range of measures to raise revenues, such as reduction of subsidies, increasing corporate tax and continuing to focus on its economy diversification targets for the long term.

OBG added, “Although hydrocarbons still account for 33.9 per cent of the Sultanate’s GDP and 78.7 per cent of state revenues, non-oil sectors play an increasingly prominent role in the country’s economic situation. The Government targets heavy industries in particular by planning to increase its contribution to the GDP from 19.8 per cent today to 29 per cent by 2020”.

It added, “At the same time, the Omani government is targeting an annual growth of 6 per cent in the mining sector, with a series of regulatory initiatives to boost investor interest”.

OBG said that oil accounted for 59.4 per cent of the Sultanate’s exports of goods, stressing that the Government is expected to continue production of crude oil near its current level of one million barrels per day until 2020 at least while untapped marine areas in Oman and attractive business environment continue to provide opportunities for international oil and gas companies.