Manufacturing sector aids economic recovery

As a result of economic stimulus and economic diversification efforts, the Omani economy continued to recover in the post-Covid scenario and recorded a 12.7 percent growth by the end of the third quarter of 2021, the latest figures released by the Ministry of Economy said.

The manufacturing sector was the biggest contributor with the highest growth rate this year of 25.8 per cent, the report said.

It may be noted the economy registered a negative growth of 16.5 per cent at end of the third quarter of 2020.

“The non-oil activities grew at 8 per cent and contributed 17.6 billion to the GDP, while oil activities grew 26.5 per cent, contributing 7.4 billion to the GDP.”

By the end of Q2, 2021, Oman’s gross domestic product (GDP) rose by 10.1 per cent at current prices, registering RO 15,302 million as compared with RO 13,898 million over the same period in 2020.

This is mainly attributed to an increase in the average price of crude oil by 9.9 per cent as of the end of Q2-2021.

The value-added of non-oil activities amounted to RO 11,456 million by the end of Q2-2021, up by 11.1 per cent compared with the same period in 2020.

In its latest World Economic Outlook report (October 2021), the IMF projected that the global economy would increase by 4.9 per cent and 5.9 per cent in 2021 and 2022, respectively.

In its report issued in May 2021, Fitch Ratings affirmed Oman’s credit rating at BB-. The agency expects that Oman’s deficit will decline to 6.1 percent of GDP during 2021and predicted the national economy would grow by 3.3% during 2022.

However, on Monday, Fitch revised Oman's Outlook to Stable from Negative while affirming the sovereign's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at 'BB-'.

The report estimated that the budget deficit narrowed to 3.4 per cent of GDP in 2021, from 16.1% of GDP in 2020. Hydrocarbon revenue grew by a third, according to our estimates, driven largely by a 28% rise in Oman's average fiscal oil price, and likely accounted for more than half of the narrowing in the budget deficit.