The report, prepared by the BMI Research Unit of Fitch Ratings, said on Wednesday that higher oil and gas production in the Sultanate will boost exports while the government increases non-oil sector investments to diversify hydrocarbon revenues.
The report predicted that the Sultanate’s GDP will rise to 2.8 per cent this year and 3.5 per cent next year, stressing that the rise in the price of oil will boost government consumption and economic diversification efforts will continue in full swing and generate significant investments in manufacturing, logistics and tourism.
The report also predicted that the production of Omani crude oil will rise in the second half of this year as part of an agreement in Vienna between members of the Organization of Petroleum Exporting Countries (OPEC) to boost production while increasing the production of natural gas from the field of Khazzan.
The report stressed that oil and gas exports will increase net exports and boost the real GDP, while the rise in the price of oil, which accounts for 55 per cent of state revenues, will support the government spending.
The report said that hydrocarbon gains in both prices and production allow the government to return to expansionary fiscal policy in 2018 after three consecutive years of spending cuts and government investments in non-oil sectors will increase economic activity in the coming period.
The report pointed out that the construction sector in the Sultanate outperforms the rest of the region with the industry growth forecast at 10.4 per cent this year and 11.5 per cent next year, compared with regional averages 7.1 percent and 7.3 per cent respectively.
Source Link: timesofoman.com