CBO Releases Mid-Year Review of Oman Economy
The CBO has released the Mid-Year Review of the Omani Economy for 2015 covering recent macroeconomic developments in the Sultanate. The review indicated that reflecting the persistently low crude oil prices in the global markets and sluggish global growth, the Sultanate exhibited slowdown in economic activities in the first three quarters (January-September) of 2015.
The preliminary data indicated that the Sultanate's nominal GDP contracted by 14.2 per cent, in contrast to a 4.3 percent growth over the same corresponding period a year ago.
The inflationary pressure in the Sultanate of Oman continued to soften mostly reflecting the decline in the commodities prices, reduced government spending and notable appreciation of US Dollar in real effective terms since mid-2014. The average inflation based on CPI for the Sultanate stood at 1.0 percent during the January-September 2014 as compared to 1.1 percent in 2013.
As per the data, while the petroleum sector GDP contracted sizably by 38.5 percent, the non-petroleum sector recorded a modest increase of 4.7 percent.
The report further revealed with Oman's hydrocarbon sector still being primary to its economy, the decline in oil prices on a sustained basis has pushed Oman's fiscal balances to deficit from 2014.
The Sultanate's annual State General Budget for the year 2016, has been dovetailed with the objectives stated under the Ninth Five-Year Development Plan (2016-20) and crafted to address the ensuing challenges in fiscal management of the Sultanate.
The growth of monetary aggregates in Oman continued its sustained growth pattern despite the decline in crude oil prices which commenced in the second half of 2014. The weighted average interest rate on Rial Omani deposits declined from 1.030 percent in September 2014 to 0.894 percent in September 2015, while the weighted average RO lending rate decreased from 5.163 percent to 4.790 percent during the same period. Merchandise exports of the Sultanate declined sharply by 32.8 percent to RO 10,446 million in January-September 2015, while the value of merchandise imports (on c.i.f. basis) dropped marginally by 0.4 percent to RO 8,383 million.
With a proper mix of financing options, the government would be able to finance higher fiscal deficits envisaged under the scenario of lower oil prices. The Government would make intensified efforts for diversification of the economy during the Ninth Five Year Plan (2016-2020) so that the tradable sector grows.
Full text of the Mid-Year Review.
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