Oman GDP Grows by 12%, Deficit Narrows

Oman’s economy has achieved a robust 12.3% growth rate to OMR13 billion ($33.78 billion) for the first half of 2017, mainly driven by a marked growth in crude oil prices in the international market and prudent fiscal policies of the government.

The average price of Oman crude surged ahead by 35.4% to $51 per barrel for the January to August period of 2017, against $37.6 a barrel for the same period of 2016, shows a monthly report released by National Center for Statistics and Information, ONA reported.

With an increase in crude oil prices, the economy started gaining strength since the beginning of this year, reversing a slackness witnessed during the previous two years.

The oil sector’s gross domestic product grew by 34.9% to OMR4.2 billion in the first half, whereas the non-oil sector edged up by only 3.8% to OMR9.1 billion.

But the total production of crude oil in Oman fell by 3.9% to 235.33 million barrels for the first eight months between January and August, against 244.79 million barrels of crude oil for the same period of last year.

Crude oil sector contribution alone soared by 42.3% to OMR3.5 billion for the first half between January and June, against OMR2.5 billion for the same period of last year.

The non-oil sector’s GDP grew by 3.8% to OMR9.1 billion during the January to June period of this year, from OMR8.7 billion for the corresponding period of last year. Non-oil GDP was mainly driven by a surge in basic chemicals and mining activities, said the report.

  Deficit Narrows

The budget deficit for the first eight months between January and August showed a marked fall of 36.5% to OMR2.7 billion, against OMR4.3 billion, added the report. An increase in revenue and austerity measures helped the government contain the budget deficit, said a market analyst, who preferred anonymity.

The government revenue increased by 25.8% to OMR5.3 billion for the first eight months, from OMR4,2 billion for the same period of last year. Net oil revenue alone rose by 39.3% to OMR2.9 billion for the January to August period of this year.

Also, public expenditure edged down 1.3% to OMR7.3 billion from OMR7.4 billion during the period under review. Of this, current expenditure moved up by 1.2% to OMR5.2 billion, while investment expenditure declined by 3.9% to OMR1.7 billion during the first eight months of 2017.