How the Sultanate’s economy will fare in 2018

BADER AL KIYUMI -

baderalkiyumi@hotmail.com -

Several questions come to mind about how the economy in the 2018 will fare as we march ahead. As the year 2017 ended both positively and negatively, we assume how this vital sector fares this year. Will it grow for the better compared to the last three years since the crises hit the oil and gas industry during mid-2014?

Sultanate’s fiscal budget for 2018 promises to spur growth and kick-start the much needed development to push the economy in the right direction. The budget sees an expenditure growth of RO 12.5 billion this year, rising from RO 11.7 billion to the budget in 2017.

The country, however, is banking on oil prices to go up or stay stable this year to fund heavy spending on job creation and social welfare. This year’s budget is based on an average oil price of $50 per barrel, and as currently, the international oil price trades at around $65, showing good trend to further rise higher.

Outlays towards oil and gas projects are projected at over $11 billion in the budget which underscores the continuing importance of the hydrocarbon industry towards economic development.

Ban Ki-moon, former Secretary-General of the United Nations and South Korean diplomat, had remarked “that sustainable development is the pathway to the future which we need for all. It offers a framework to generate economic growth, achieve social justice, exercise environmental stewardship and strengthen governance.”

It has been a year since the government removed fuel subsidies and the question in each one’s mind is: Will oil prices continue to rise gradually?

At present Omani citizens get subsidized fuel to all those above 18 years of age and own a vehicle and who has a total monthly income not exceeding RO 600. If the oil prices continue to rise; it will give rise to more questions in our mind. Are the local market prices threatened to rise and how are the prices going to affect citizens and residents alike?

His Majesty the Sultan’s directive to recruit 25,000 Omanis in the private and government sectors is truly a commendable step. It has to been seen if this step goes well for the economy and related sectors. How will the historic move help improve the Omani job market?

On the real estate front, the rising number of new buildings coming up in all governorates is seen as a challenge to the real estate sector. Will this also have an effect on the rents or will it continue to remain stable?

Experts believe that the rent will be stable after the government decision to allow expatriates to bring their families if their salaries are more than RO 350 compared to the previous decision of RO 600.

The government had announced earlier this month that Omani citizens aged 18 and above who earn RO 600 or less a month will get 200 litres of subsidised fuel (M91) every month.

Moreover, it is also felt the new recruitment policy of the government will help real estate agents as the expatriate scout for homes to bring in their families. Will the new year see booming of the investment sector?

The Sultanate also recently signed an agreement with China in Al Duqm Freezone, which will immensely help attract more investors. China’s relations with the Sultanate in manufacturing, logistics transport, mining, fisheries, tourism and training fields and the merger between the Omani-Chinese development strategies will provide a much need boost.

Since long, the Sultanate has been paying much attention to improve the tourism sector by building entertainment facilities in all the governorates. Recently, Omran launched hotels in different governorates and in Dhofar and other locations which will provide large scope for tourists.

The much-awaited Hawana Aqua Park, the first of its kind in the Sultanate, developed by Muriya, Orascom Development Holding and Omran, opened in Salalah last week. This will definitely help the tourists both inbound and out of Salalah and for tourists attending the khareef festival this year. New projects like the Quriyat Tourism Complex costing RO 385 million is bound to provide recreational and residential facilities. The new facilities are expected to support tourism infrastructure in the country.

It is expected that more tourism projects and developments are in the pipeline and ready for launch in time for the Salalah Tourism festival which will go a long way to attract visitors from different countries.

The Muscat Festival 2018 which begins this week (January 18) will also attract more tourists from different countries and local visitors. The Oman International Exhibitions and Conferences Centre which is expected to open fully this year will also assist to attract more investors and tourists to the country.

During the third quarter of 2017, the Sultanate began the operations from Suhar airport and other airlines from the Gulf including Qatar Airways, Air Arabia and Salam Air which launched their flights to many destinations.

The new Muscat International Airport is expected to open officially this year and has already done with the trial runs from the new Airport on December 23. It also remains to be seen if more new flights will result in large volumes in number of tourists visiting the country.