Sultanate’s GDP grows by 12.3pc

Muscat: The National Centre for Statistics and Information (NCSI) recently released the third issue of the Economic Outlook of Oman, which highlights the economic performance of the Sultanate during 2018, as well as the regional and global economic developments and it is prospective.

The report highlighted the Sultanate’s economic performance in 2018, which witnessed the growth of gross domestic product (GDP) at current prices by 12.3 per cent, with an increase in the value added of non-oil activities by 2.3 per cent. The value added of oil activities increased by 36.7 per cent, and the GDP had grown from RO 27.1 billion in 2017 to RO 30.5 billion in 2018.

The report also pointed out to the state budget, with the deficit in the Sultanate’s state budget reaching RO 2.6 billion, while the public revenues increased by 28.6 per cent reaching RO 10.9 billion. The total public expenditure increased by 10.8 per cent, reaching RO 13.6 billion. It indicated that the increase in the country’s public revenues was due to a rise in the average price of Omani crude oil to $69.7 mark per barrel, compared to $51.3 mark per barrel in 2017.

The report stated that the domestic liquidity (M2) in Oman grow by 8.3 per cent in 2018, reaching RO 17.4 billion, compared to RO 16.1 billion in 2017. This increase in 2018 was due to the increase in the quasi money 12.1 per cent as a result of a noticeable increase in the deposits by foreign currencies, which rose by 81.4 per cent in 2018, compared to the previous year.

The report showed that Muscat Securities Market index declined by 15.2 per cent in 2018, reaching 4,323.7 points, compared to the previous year. The Shariah Index also declined by 17.1 per cent in 2018, compared to the previous year.

The report of the Economic Outlook of the Sultanate also pointed out that the volume of foreign direct investment in the Sultanate till the end of the fourth quarter of 2018 has reached RO 10.6 billion, compared to RO 9.2 billion in 2017, while the inflows volume of the foreign direct investment till the end of the fourth quarter of 2018 has reached RO 1.4 billion.

It showed that the tourism share in GDP has declined from 2.7 per cent in 2017 to 2.6 per cent in 2018, while direct value added of the tourism sector has increased by 6.8 per cent in 2018, recording RO 788.6 million, compared to RO 738.4 million in 2017, and the tourism balance recorded a deficit of RO 276.1 million in 2018, up from the recorded deficit in 2017, which reached RO 4.7 million.

The inflation rate in the Sultanate base year 2012 was 0.9 per cent in 2018, compared to 1.6 per cent in 2017. This decline was mainly due to the drop in prices of the health sector, which recorded a decrease of 2.7 per cent, the prices of food and non-alcoholic beverages group, which recorded a decrease of 0.7 per cent, and the prices of clothing and footwear group, which declined by 0.6 per cent, the price of recreation and culture group, which declined by 0.3 per cent, and the price of communications group, which recorded a decrease of 0.2 per cent.

The volume of trade exchange in the Sultanate increased by 13.5 per cent in 2018 compared to the previous year, to reach about RO 26.4 billion compared to RO 23.2 billion in 2017. This increase was mainly due to the rise in the value of merchandise exports by 26.9 per cent.

The Sultanate’s trade balance in 2018 recorded a surplus of RO 5.70 billion, up by 178.5 per cent, compared to the surplus recorded in the previous year of 2017. The surplus in trade balance was due to an increase in the value of merchandise exports from RO 12.7 billion in 2017 to RO 16.1 billion in 2018.

As for the manpower and employment market, the report showed that the total number of manpower in the Sultanate in 2018 has reached 2.21 million persons, compared to 2.27 million workers in the previous year of 2017, recording a decline of 2.3 per cent, while the worker of employed workers in the private and family sectors was 89.5 per cent, compared to only 10.5 per cent in the government sector.

The report’s forecasts stated that according to the Arab Monetary Fund, the Sultanate’s GDP growth at the constant prices is expected to reach about 3 per cent during the 9th five-year plan (2016-2020), as a result of the country’s pursued policies that aimed to achieve economic diversification to support the five targeted sectors within the national programme for enhancing the economic diversification, which is called (Tanfeedth).

The predicted growth of the Sultanate’s GDP was a result of its continued endeavours that aim to reduce the deficit in the state public budget and the efforts to curb the high levels of public debt and the procedures of boosting private sector investments. The report also stated that the Sultanate’s inflation rate will increase from 1.4 per cent in 2019 to 1.9 per cent in 2020.

According to the predictions of the International Monetary Fund (IMF), the global economy is expected to grow by 3.5 per cent in 2020, with an expected a rise in the growth rate of the advanced economies by 1.7 per cent in 2020, and about 4.7 per cent growth in the economic activities of the emerging and under-developing economies in the year of 2020. The global trade volume in goods and services is expected to grow by about 3.7 per cent in 2020.

As for the expectations of the Organization of Petroleum Exporting Countries (OPEC), the total average of the global demand for crude oil in 2020 will reach 29.4 million barrels per day, and it is expected that the oil supply from non-OPEC countries in 2020 will reach 66.8 million barrels per day.

This report of the Economic Outlook of Oman, which is being issued annually, aims at tracking the general economic situation in the Sultanate during a year by focusing on several topics and major indicators, such as the country’s gross domestic product (GDP), the public finance of the state, the monetary indicators, the inflation rate, and the country’s trade exchanges.

This report also aims to identify the prospectus of the Omani economy objectively transparently and neutrally based on the available statistical data and information. It is also based on the most important international reports issued by the World Bank, the International Monetary Fund (IMF), the Arab Monetary Fund (AMF), the opinions of the international specialised experts and other global and regional organisations for monitoring the global economic conditions changes.

In terms of the regional and international economic situation, the global economy has recorded a growth of 3.6 per cent  in 2018, according to the estimates of IMF, while the developed economies recorded a growth rate of 2.2 per cent, and the emerging and under-developed economies recorded a growth rate of 4.5 per cent.

At the level of the Arab countries, the AMF report indicated that the rate of economic growth of the Arab countries at constant prices increased to about 2.5 per cent in 2018, compared to 0.7 per cent in 2017. Similarly, the economic growth rate of GCC countries increases by 1.4 per cent  in the same year. –ONA

Oman Observer

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