Wednesday 19 / February / 2025
Muscat: Economic stimulus programmes and other measures related to financial sustainability and raising the efficiency of government spending led to improved economic performance in Oman in 2021, said Minister of Economy Dr Said bin Mohammed Al Saqri.
Speaking at a programme titled, ‘With the Youth’, where he spoke about the realities of the Omani economy and future aspirations, the minister explained that a number of programmes had together created an environment conducive to economic efficiency and output.
“The fiscal balance programme will control and rationalise government spending, introduce certain taxes such as the value added tax (VAT) and reconsider some procedures related to rationalising and improving the performance of public money,” he said.
These measures, explained the minister, were also brought in to stimulate growth of other productive economic sectors and to enable the government to spend on various development programmes and basic services.
Economic growth was seen in the performance of oil activities, which expanded 25.5 percent in 2021, as well as non-oil sectors that grew at 7.8 percent. “When there is a contraction in performance, it must stimulate aggregate demand, or aggregate supply,” explained Al Saqri.
“In the Sultanate of Oman, a series of economic stimulus programmes have been implemented, including the review of many government fees, reducing a large number of them and unifying some of these fees.
“Taxes have been reviewed and designed to serve the targeted sectors such as the sectors for economic diversification and small and medium enterprises,” he added.
“This enables the ability and continuity of economic sectors when it comes to production and continuation of their economic activity. Facilitating liquidity and borrowings by commercial banks also enabled institutions to continue to produce the goods and services they provide.”
‘Invest Easy’ portal
The Minister of Economy also pointed to the changes made to the ‘Invest Easy’ portal, which has made it easier for investors to set up operations in Oman.
Launched by the Ministry of Commerce, Industry and Investment Promotion, the portal has since incorporated many requirements, transactions and procedures that investors need. The ‘Invest Easy’ portal has become a one-stop shop that facilitates business environments and regulates investment and commercial operations.
Pointing to the impact economic diversification has had in enabling Oman to withstand oil price shocks, Al Saqri said, “The economic activity of the non-oil sectors is now more mature and able to absorb the decline in oil prices and revenue.”
He added, however, that as a result of the COVID-19 pandemic and associated supply chain challenges, inflation rates would increase by 4.4 percent. These would be addressed through many means, including spending control measures.
“Through reviewing the wages paid, the interest rates in banks and interest on government bonds, internal inflation rates can at least be controlled,” said the minister.
Tenth Five-Year Plan
During his interaction, the Minister of Economy also stressed the importance of committing to the financial framework programme of the Tenth Five Year Plan, since this framework is expected to improve performance in general, as a result of which 27,000 jobs are expected to be generated annually.
“The Ministry of Economy and many government agencies launched a number of economic stimulus programmes and help those groups, affected by the COVID-19 pandemic, having a role in maintaining the continuity of many economic activities, especially small and medium enterprises,” he explained.
Expansion in oil sector
Furthermore, in the field of social protection programmes, an initiative was launched to support hydrocarbons, and include within its framework basic services such as electricity and water.
“Oman has maintained its growth in oil production over the past years, thanks to the use of modern technologies and continuous efforts to improve extraction,” added Al Saqri.
“There must also be a comparison and balance between gas production and exports, while the gains and losses from manufacturing and exports must also be studied. This is the equation Oman has reached, in using a part of these for export and the rest for industries.”’
Economic diversification
To continue to maintain and sustain economic growth, the minister said it was also important to enhance the role played by other economic sectors, while diversifying means of production.
“There is a discrepancy seen during the Ninth Five Year Plan in the performance of the sectors for economic diversification,” he explained. “It is natural for the tourism sector to decline during the pandemic, but there are other sectors that have achieved the desired goals, such as the manufacturing sector which achieved growth of nine percent and the mining sector, which grew by more than 50 percent.
“One of the most important objectives that has been added to the Tenth Five Year Plan is to target sectors with a comparative advantage to employ a greater number of Omanis as well as economic sectors that do not directly depend on government spending,” said Al Saqri.
