Oman Looks to Logistics Sector to Strengthen GDP

Oman’s rapidly developing logistics sector is being positioned as the biggest contributor to the country’s gross domestic product after hydrocarbons, the nation’s long-standing economic mainstay, said a senior Omani government official.

The logistics sector has been singled out by the Omani government to hasten the sultanate’s economic diversification away from its current reliance on oil and gas to support GDP growth, Ahmed bin Mohammed al Futaisi, minister of transport and communications, was quoted as saying in an Oman Daily Observer report, TradeArabia reported.

The official delivered the keynote address at the Oman Ports Conference, which was held at the Grand Millennium Muscat Monday, it said.

Futaisi said that the sultanate is aiming for logistics to be a second source of GDP and for Oman to be global logistics hub by 2040.

He further noted that based on their qualitative and qualitative ambitions, the sector’s GDP contribution is targeted at RO3 billion ($7.79 billion) in 2020, up from RO1.1 billion ($2.857 billion) presently.

Futaisi explained that it has been projected to rise to RO14 billion ($36.365 billion) by 2040, a very ambitious target, but not impossible to achieve.

Meanwhile, supported by easing fiscal adjustment, infrastructure investment and reforms to promote non-oil sector activity, Oman is anticipated to record stronger growth this year, the World Bank said.

The World Bank projects Oman’s economic growth to pick up to 2.3% in 2018, better than the average 2% growth forecast for (Persian) Gulf Cooperation countries’ (United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait) economies as a group this year.

The World Bank estimates show that Oman’s economy has recorded a 0.7% growth in 2017. According to Oman’s 2018 budget statement which was released earlier this month, the sultanate’s government expects the economy to grow by a minimum 3% in 2018.

“The GDP growth is projected to be positive at a rate of at least 3% in 2018. This is driven by oil price recovery and efforts to diversify the economy and improve investment climate,” the budget statement had said. The World Bank said that strengthening private consumption and investment are anticipated to support stronger growth in the region.

It said the 2017 slowdown in the region was driven by oil production cuts, fiscal consolidation and continued geopolitical tensions.