BUSINESS REPORTER
MUSCAT, SEPT 24
Dr Nasser bin Rashid al Maawali, Under-Secretary of the Ministry of Economy, said the Omani economy has witnessed remarkable growth as exemplified by the performance of the state's public finances and improvement in the credit ratings issued by international ratings agencies. Additionally, the main economic indicators, whether at the level of performance of economic activities or with regard to consumer prices, and labour market conditions and employment, attest to the general improvement in the country’s economic performance.
In a statement to Oman News Agency (ONA), the official said that Oman’s nominal gross domestic product (GDP) during the first half of 2022 grew 32.4 per cent at current market prices to reach about RO 20.26 billion, compared to RO 15.30 billion during the first half of 2021. At constant prices, GDP grew by 3.9 per cent during H1 2022 to reach about RO 17.59 billion, compared to RO 16.93 billion during H1 2021.
The added value of hydrocarbon activities grew by 9.2 per cent, constituting 34.1 per cent of GDP in H1 2022, compared to 32.5 per cent during the same period in 2021. Non-oil activities improved by 2.1 per cent during the first half of 2022
Al Maawali listed several factors that helped improve these indices, notably the strong rise in crude oil prices in global markets, and most importantly, the effectiveness and efficiency of the financial and economic policies taken by the Sultanate of Oman to aid the economic recovery efforts from the pandemic. These efforts were aimed at accelerating the achievement of the goals and programmes of the 10th five-year development plan (2021-2025), he stated.
Among the most important sectors that recorded remarkable growth were "transport and storage" and "accommodation and food services activities", which amounted to 29.4 per cent and 29.2 per cent, respectively. Mining activity and manufacturing activity grew by 15.4 per cent and 11.5 per cent, respectively. This primarily translates into the economic stimulus policies that were pursued during the past two years in the wake of the pandemic and the sectors' need for stimulus packages and initiatives through which they can return to their natural growth path and contribute to the recovery of the national economy as a whole.
This growth, he said, stems from the economic policies approved by the Tenth Five-Year Development Plan (2021-2025), specifying the priority of economic diversification and financial sustainability, including creating a stimulating work environment that increases the income of the economic diversification sectors and shifts from labor-intensive investments to investments based on qualified human capital and technology instead of reviewing the policy of incentives, support and financing and linking them to the targeted sectors in the economic diversification, expressing his belief that the fruits of these policies have begun to reflect positively on the nature of the performance indicators of the Omani economy.
Al Maawali said that current efforts are focused on maintaining inflation within tolerable limits to ensure no adverse impact on the living conditions of individuals. ”We are all aware that the world is going through this year, in particular, with unprecedented increases in the level of global prices, driven by the instability of supply of various goods and services, especially basic food and agricultural commodities, in addition to the imbalances in global supply chains, the increase in import and services costs, and the increase in Russian costs. The biggest role in it is in addition to the rise in global energy prices. The increase in domestic demand for some goods and services as a result of the recovery of the movement of economic activity after the decline of the pandemic, also contributed to the rise in the general level of prices,” he said.
In this regard, he pointed out that the inflation rate in the Sultanate of Oman remained at acceptable limits, reaching about 3.1 per cent during the period (January-August) 2022, which is much lower than the rate reached by some global economies and even advanced economies.
“Moreover, the rate did not, in general, represent a large gap from the expectations drawn by the tenth five-year development plan in its financial framework to maintain the average inflation rate throughout the years of the plan within the range of 2.8 per cent, especially since we have witnessed a continuous decline in monthly inflation rates since the beginning of 2022, as they declined from 4.4 per cent in January to about 2.4 percent in August 2022, despite the prospects of uncertainty and economic turmoil that have swept the world in the past two years,” he stated.
Commenting on the performance of public finances, the Under-Secretary said that Oman’s financial situation witnessed a clear improvement during the January-July 2022 period, compared to the same period last year. This is attributable to the increase in public revenues by a significant rate of 53.5 per cent to reach about RO 8 billion by the end of July 2022 due to the rise in oil prices and the rise in public spending. However, the rate of increase was less than the rise in public revenues, which amounted to 8.8 per cent to reach about RO 6.98 billion until the end of July 2022 as a result of continuing to implement financial control measures, which led to an improvement in the performance of the general budget In addition to improving the management of the loan portfolio.
Domestic liquidity grew by 3.3 per cent and the increase in total deposits in the banking sector by 5.4 per cent at the end of June 2022, in addition to the improvement in the performance of the Muscat Stock Exchange, where the index climbed 15.6 percent to reach 4,585 points at the end of August 2022, compared to 3,967 points at the end of August 2021, accompanied by an increase in trading volume by 21.4 per cent.
He added that the International Monetary Fund and the World Bank expect the Omani economy to grow by 5.6 per cent in 2022 while the inflation rate will remain within acceptable limits within the range of 3 per cent despite the rise in global commodity prices, thanks to measures and initiatives taken by the government to mitigate inflationary pressures.
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