Oman’s real GDP grows by 1.9%

MUSCAT: Oman’s economy continued its upward trajectory in 2024, with real GDP growing by 1.9% in the first half of the year compared to the same period in 2023, according to a recent report by the Central Bank of Oman (CBO). The report attributes this growth primarily to a 3.6% expansion in non-oil activities, underscoring the country’s ongoing efforts to diversify its economic base beyond hydrocarbons.

Despite global economic uncertainties and fluctuations in oil prices, the report highlights that oil activities still accounted for 32.5% of total real GDP in the first half of 2024. However, Oman’s long-term economic outlook remains positive, driven by the government's focus on economic diversification, financial reforms, and strategic investments in non-oil sectors.

The report outlines key fiscal policies that have contributed to economic stability, including rationalized government spending, reduced public debt levels, and revenue diversification efforts. The implementation of these measures has helped mitigate risks associated with oil price fluctuations and strengthen Oman’s financial foundation.

One of the significant milestones highlighted is the launch of the social safety net program, designed to balance social welfare needs with long-term financial sustainability. This initiative ensures economic inclusivity while maintaining fiscal discipline.

Although the average price of Omani crude oil declined in 2024 compared to the previous year, its impact on the economy was cushioned by stronger performance in non-oil sectors such as manufacturing, logistics, tourism, renewable energy, and technology. These sectors are expected to play an increasingly vital role in Oman’s economic expansion, reinforcing the need to enhance foreign and domestic investment in non-hydrocarbon industries.

The government’s diversification strategy has also bolstered international confidence in Oman’s economy. Recent assessments by credit rating agencies reflect improved sovereign credit ratings, signaling trust in the country’s financial policies and ongoing economic reforms.

On the monetary stability front, Oman’s foreign reserves remained robust, with the Central Bank of Oman holding approximately RO 7.5 billion in reserves as of September 2024. This amount is estimated to cover 6.6 months of commodity imports, ensuring stability in Oman’s exchange rate system and reinforcing the country’s resilience against external shocks.

The report underscores the importance of maintaining sufficient foreign exchange reserves, particularly in a rapidly changing global economic environment.

Overall, the continued growth of Oman’s GDP, coupled with prudent fiscal policies and economic diversification initiatives, positions the country on a stable path toward sustainable economic development. — ONA