Oman’s double-digit GDP growth bucks global trend
However, while hydrocarbons remain an important source of revenue for the nation, the share of petroleum activities in the country’s GDP decreased from 46.4 per cent in 2014 to 35.5 per cent in 2018. Non-petroleum activities accounted for 68.4 per cent of the GDP in 2018, up from 59.9 per cent in 2014. Despite this, revenue from hydrocarbons continues to provide the lion’s share of government revenues. In 2018, 78.2 per cent of revenues came from the hydrocarbons sector.
“Non-oil exports, witnessing robust growth in the last few years, are likely to keep the momentum going,” said the CBO official.
“In view of the above, non-petroleum activities offer promising prospects in 2019. Considering the prospects of petroleum and non-petroleum activities, the macroeconomic outlook for 2019 appears reasonable but fraught with challenges. The outlook however looks to be robust over the medium-term, with accelerated traction in non-oil economic activities.”
Commenting on this, Dr Anchan CK, a trade advisor in Oman, felt that hydrocarbons still had a very important role to play in Oman’s economic development, given that some non-oil industries included the manufacture of by-products from the oil and gas industry.
“Oman is naturally well situated for petrochemical development,” he said. “In recent times the increased emphasis on incountry-value has also benefitted this downstream industrial segment, as the Sultanate tries to heighten value added from its diverse natural resources. Tied to this is the drive to boost the ICV programme, under which companies bidding for contracts must allocate a certain percentage of their inputs to domestically produced goods and services. ICV has been particularly strong in the oil and gas sector, which is a major market for many equipment and machinery manufacturers.”
In addition, Ramanuj Venkatesh, a financial analyst, said Oman benefited from a peaceful outlook in an important geostrategic location, which appealed to foreign investors.
He said: “Oman needs to compete with the likes of the United Arab Emirates and Saudi Arabia to become a regional player, but the country’s peaceful policy and non-controversial stance means it is able to attract many investors. It’s important geographic location means many investors will come here in the future, because from Oman, you can easily ship goods to many areas in the region. A stronger GDP bodes very well for the people, because more GDP means there is more money to invest into development programmes.
“Given that Oman is currently pursuing a non-oil future, this extra money can be invested into areas such as tourism, food security and mining,” said Venkatesh. “It also means that more jobs will be created and there will be more disposable income, leading to further spending.”