ECONOMIC OUTLOOK POSITIVE FOR NON-OIL SECTORS, SAYS CBO REPORT

The Sultanate’s economic outlook appears to be healthy over the medium term aided by thriving non-oil economic sectors and new enabling policies, including those that foster a more positive business climate, the Central Bank of Oman (CBO) said in its new published 2018 Annual Report.

“Considering the prospects of petroleum and non-petroleum activities, the macroeconomic outlook for 2019 appears reasonable but fraught with challenges, especially on the back of expected range-bound oil prices and uncertainty surrounding them. The outlook, however, looks to be robust over the medium-term with expected recovery in oil prices and accelerated traction in non-oil economic activities,” it stated.

PETROLEUM & NONPETROLEUM SECTORS SEE NOMINAL GROWTH

The petroleum and non-petroleum sectors grew in nominal terms by 37.1 percent and 2.9 percent, respectively in 2018. This can be attributed to the Khazzan phase-I becoming operational and natural gas emerging as a key factor to the country’s economy, the report noted.

The evolving non-petroleum sector continues to also be an important catalyst in ensuring sustainable growth in the Sultanate with programmes such as ‘Tanfeedh’ and other diversification initiatives fostering better business environment along with private sector participation are factoring highly in the growth of non-hydrocarbon sectors.

However, Omani oil prices averaged at $61 a barrel during the first three months of 2019 as against $62.9 per barrel during the same period last year. Amid this backdrop, petroleum activities in nominal terms are likely to be moderate during 2019, the report added.

SURGE IN OIL PRICES HELP

The Omani crude oil price averaged at $69.7 a barrel in 2018 as compared to $51.3 per barrel during 2017. According to the report, the recovery in oil prices also helped growth in non-oil economic sectors, though “dependency of non-oil activities on oil activities has somewhat weakened in the last few years.”