H.E. Dr Nasser bin Rashid Al-Mawali, Undersecretary of the Ministry of Economy, documented remarkable improvement in the performance of the Omani economy; a feat that was realised through the performance of the state’s public finances and improvements noted by international credit rating agencies.

His statement is outlined by key performance indicators of economic activities and those in regard to consumer prices, labour market conditions, and employment – all of which, in one way or the other, mark an improvement in economic performance in general.

In Focus: Oman’s GDP Growth

In the statement issued to the Oman News Agency, His Excellency was quoted as having said that the economic growth can be attributed to the overall growth in the Gross Domestic Product (GDP) of the Sultanate in the first half of 2022. At current prices, the GDP rise constituted 32.4 per cent to reach RO20.26bn when compared with the RO15.3bn that was registered in the same period in 2021.

His Excellency said in a statement to the Oman News Agency that one of the most important indicators that can be demonstrated is the growth of the gross domestic product during the first half of 2022, as it grew at current prices by 32.4 per cent to reach about 20.26 billion Omani riyals, compared to 15.30 billion Omani riyals during the first half of the year. 2021 AD.

Much of this has been attributed to a strong increase in oil-related hydrocarbon production activities by 9.2 per cent, constituting 34.1 per cent of the overall GDP in H1 2022, when compared with 32.5 per cent in the same period in 2021. Meanwhile, non-oil activities contributed roughly 2.1 per cent more in H1 2022 than in the same period in 2021.

The growth of the Omani economy was largely pegged by His Excellency on the tangible rise in crude oil prices in global markets, and the strong and efficient economic policies undertaken by the Sultanate during the periods subsequent to the pandemic.

His Excellency also delineated how oil revenues have largely been devoted toward achieving financial balance, launching key development projects that will accelerate “the generalisation” of targetted basic services, and accelerating the goals and programmes set in motion under the 10th five-year development plan (2021-2025).

In Focus: Inflation

Speaking on the rising prices of commodities, the Undersecretary stated that maintaining a reasonable and safe level of inflation was among the key underpinnings of the Ministry’s agenda to drive a stable market. He was quoted as saying: “One of the most important goals of economic policy was to ensure that there is no direct impact on the economic conditions of individuals and that economic crises do not reflect on the prices of major goods and services.

“We are all aware that the world is going through this year, in particular, with unprecedented increases in the level of global prices [of commodities], driven by an instability in the supply of various goods and services, especially basic food and agricultural commodities, in addition to imbalances in global supply chains, an increase in import and services costs, and the increase in commodities supplied by Russia.”

Inflation levels in Oman currently hover on average around 3.1 per cent – which is among some of the lowest levels in the world, outperforming even developed nations and advanced economies. This was posted following a drop from the 4.4 per cent inflation rate noted in January 2022.

It must also be noted that inflation rates did not deviate much from expectations drawn by the tenth five-year development plan in its financial framework. Its goal is to maintain an inflation rate of 2.8 per cent despite the economic downturn affecting nations globally.

Despite supply-chain disruptions and concerns posed by political tensions globally, the Sultanate has successfully managed – through economic policies – to secure a steady supply of foodstuff (wheat, grains, sunflower oil, etc.)

In Focus: Trade

Editorial credit: byvalet / Shutterstock.com

The trade balance surplus earned by the Sultanate reportedly grew by a remarkable 185.8 per cent to reach about RO4.71bn in the first half of 2022, compared to RO1.65bn marked in the same period in 2021. Among these, merchandise exports grew by a significant 61 per cent and non-oil exports rose by 51.2 per cent in the first half of 2022 compared to the same period in 2021.

In Focus: 10th Five-Year plan

The 10th five-year development plan identified three main challenges faced by the Omani economy: the high deficit of the state’s General Budget, the high public debt to GDP ratio, and the continuous decline in the credit ratings.

An increase in public revenues of 53.5 per cent, reaching about RO8bn, was witnessed in the period until the end of July 2022. This helped the Sultanate enlist a financial surplus of RO1.02bn until the end of July 2022, compared to a financial deficit of RO1.21bn in the same period in July 2021.

Meanwhile, the second challenge faced by the tenth five-year plan is currently being rectified as the performance of public finance indicates a decrease of 11.5 per cent – RO2.4bn – in the total public debt of the Sultanate to reach RO18.4bn by the end of August 2022 when compared with RO20.8bn in the same period in 2021.

The third challenge: a plan to tackle the continuous decline in the international credit ratings was also marked with success as the Sultanate witnessed an improvement in credit ratings by the major international rating institutions such as Fitch and Standard & Poor’s (S&P).

In Focus: Public Revenues

His Excellency the Undersecretary of the Ministry of Economy also explained that the public financial performance (public revenues) in the period between January and July 2022 witnessed an uptick of 53.5 per cent when compared with the same period in 2021 to hit RO8bn.

Other monetary indicators also grew, with the growth of domestic liquidity up by 3.3 per cent and an increase in total deposits in the banking sector of 5.4 per cent until the end of June 2022. This comes in addition to the robust performance of the Muscat Securities Exchange, where the index witnessed an increase of about 15.6 per cent to 4,585 points by the end of August 2022, when compared with 3,967 points at the end of August 2021. This was accompanied by an increase in trading volume by 21.4 per cent.