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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Economic diversification paying rich dividends

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NEW YORK: Fitch Ratings has affirmed the Sultanate in the BB+ rating with a stable outlook. This rating came as a result of the Sultanate’s strong structural features, as well as its continued economic diversification.


According to Fitch Ratings, the Sultanate has better indicators than those in the same rating in terms of sovereign external assets that enable the Sultanate to flexibly funding government finances, despite the rise in the fiscal deficit and the external account.


PUBLIC REVENUES


Fetch added: “Through the implementation of a number of additional policies and measures, the Sultanate hopes to achieve fiscal balance by 2023, and this is evident by the Sultanate’s continued control of spending and the increase in public revenues through fiscal measures that may result in reducing the deficit from GDP to 7 per cent by 2021, despite moderation in the assumption of oil prices at around $60.


The report pointed out that among the good potentials of the Sultanate are the achievement of high growth rates and large government revenues through implementation of new hydrocarbon projects such as Khazan reservoir field and Mabrouk gas production field.


It is expected to establish a new LNG plant in Duqm and gas storage facilities in Suhar.


Preliminary forecast showed the continuation of positive GDP growth for 2019 to reach 1.8 per cent, despite the Sultanate’s commitment to the decisions of the Organization of Petroleum Exporting Countries (Opec) which is constraining average oil production.


RISE IN GDP


The Sultanate achieved a growth of 3.4 per cent in 2018 compared to a contraction of 0.9 per cent in 2017. This growth is due to an increase of 6.1 per cent in oil GDP and 2.1 per cent rise in non-oil GDP.


Total government revenues this year until the end of May increased by 15 per cent year on year, with net oil revenues up 6 per cent and gas revenues up 14 per cent. But the largest percentage gain was from ‘other revenues,’ which rose 53 per cent, and from corporate income taxes, up 46 per cent. — ONA


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