Sunday 11 / May / 2025
Muscat: Oman’s economy is likely to maintain its growth in 2024 on the back of the authorities pursuing flexible economy policies that respond to global changes, according to a senior official of the Ministry of Economy.
“The government is continuing to adopt wise policies for continuous improvement in the economy,” Dr. Nasser bin Rashid Al Maawali, Undersecretary of the Ministry of Economy, said in a statement on Saturday.
He added that there is noticeable progress in the performance of the Oman’s economy for 2023 as evident in the performance of the state’s public finances, improvement in the credit rating, in addition to the positive growth and economic indicators. Oman’s gross domestic product (GDP) at constant prices grew by 2 percent to reach about OMR26.40 billion until the end of the third quarter of 2023, compared to about OMR25.90 billion during the same period in 2022, despite the decline in oil production by 0.9 percent.
He further pointed out that during 2023 Oman saw many developments and achievements that had a positive impact in improving the performance of the country’s economy.
The current year concluded with a qualitative improvement in the performance of Oman’s economy, positive and reassuring indicators confirming the success of the economic and financial policies undertaken by the authorities. “There are expectations that the Omani economy will continue to achieve further growth in 2024 due to flexible economic policies that respond to global changes, as well as adopting stimulating economic policies and working on continuous improvement in various sectors,” he added.
He further added that there is noticeable progress in the performance of Oman’s economy for 2023 as evident in the performance of the state’s public finances, improvement in the credit rating, in addition to the positive growth and economic indicators.
Dr Al Maawali attributed this to the increase in value addition of non-oil activities with growth in most economic activities, ranging between 26.8 percent for communications and information activity, 0.6 percent for accommodation and food services activities. On the other hand, construction, manufacturing, financial, and insurance activities recorded a decline of 5 percent, 2.6 percent, 9 percent, respectively, he said.
Regarding the general level of prices, Dr. Al Maawali confirmed that the proactive government measures in 2023 contributed to protecting Oman’s economy from inflation and maintaining it within safe limits.
Due to these policies the Sultanate of Oman was able to maintain inflation rates of the consumer price index (CPI) within acceptable and safe limits avoiding negative repercussions on the standard of living of citizens.
The inflation rate reached about 1.03 percent during the January-November period of 2023, compared to 2.9 percent during the same period of 2022.
He said that monthly inflation rates have tended to decline since the beginning of 2022. It declined from 4.4 percent in January 2022 to about 0.6 percent in November 2023. This was due to government measures and policies taken to mitigate the severity of inflation, the most important of which was in stabilising fuel prices, besides support for basic foodstuffs, in addition to the decline in global prices.
In terms of public financial performance, Dr Al Maawali stressed the continued improvement of the financial situation during 2023, despite the significant decrease in public revenues amounting to 17.4 percent to reach about OMR9.8 billion until October 2023 due to the decline in average oil prices reaching $81 per barrel.
Public spending decreased by 15.8 percent, reaching about OMR9 billion as a result of continued implementation of financial control measures, which led to the state’s general budget achieving a financial surplus of OMR830 million, compared to a financial surplus of OMR1.21 billion in the same period in 2022.
Dr Al Maawali further explained that the improvement in the performance of the general budget, in addition to the improvement in the management of the lending portfolio, led to a decrease in the total public debt of the Sultanate of Oman by about OMR1.3 billion, or 7.4 percent from its level at the end of 2022, to reach about OMR16.3 billion at the end of October 2023.
He pointed out the improvement in the credit rating of the Sultanate of Oman by the leading international credit rating institutions, which issued their assessment in 2023. Fitch had raised its credit rating for the Sultanate of Oman in September 2023 to BB+ with a stable outlook, with Standard & Poor’s issuing its rating to BB+ with a stable outlook in September 2023 as well.
Likewise, Moody’s raised its credit rating in May 2023 to Ba2 while maintaining its positive outlook, as a result of the improvement in public financial performance indicators and the continued implementation of financial control measures and initiatives and a decrease in public debt.
Dr Al Maawali further stressed that the improvement in the credit rating of the Sultanate of Oman will reflect positively on creating an attractive environment for investment, attracting large number of qualitative foreign investments, and improving the image of the Oman’s economy with international organisations, the data of which investors rely on to decide whether or not to invest in a particular country.
He pointed out that the Tenth Five-Year Development Plan, since three years after its implementation, is proceeding according to the timeline set for it, and accelerating the achievement of the goals of ‘Oman Vision 2040.’
He further explained that the GDP at current prices reached OMR31.4 billion until the third quarter of 2023 which exceeded the target estimated within the plan at OMR30.1 billion, and the growth rate for non-oil activities reached 2.7 percent, which is close to the planned 3 percent.
He stressed that “the inflation rate is reassuring and is still within safe and reasonable limits. The inflation rate has reached 1.03 percent until November 2023, while according to this year’s plan, it is planned to reach 3.4 percent.”
Regarding the executive position of the strategic programmes of the tenth five-year development plan, he explained that 85 percent of the programmes are being implemented, equivalent to 367 of the 430 strategic programmes.
As for the economic diversification sectors in the plan, he stated that the agriculture, tourism and mining sectors achieved growth rates that exceeded the plan for this year, which are respectively 1.4 percent, 1.8 percent and 0.7 percent, compared to the planned 1.2 percent, 1 percent and 0.6 percent.
The growth rate of the transportation and logistics services sector is still far from the plan for the year 2023, while the education and fisheries sectors reached 0.9 percent growth, respectively, compared to the planned one percent, and 4.8 percent compared to the planned 4.9 percent.
Dr Al Maawali further drew attention to the tireless efforts made by the government in the renewable energy sector to achieve a green economy that responds to national needs and is consistent with global trends.
He stressed that Oman is moving forward at an accelerated pace in the field of hydrogen and renewable energy. “Six world-class hydrogen projects were recently agreed upon at the ‘Oman Green Hydrogen Project Summit’, at an estimated cost of $38 billion in Al Wusta and Dhofar Governorates. When operational by 2030, these projects aim to produce about one million tonnes of green hydrogen annually.
Dr Al Maawali stressed that the Sultanate of Oman is at the forefront of countries in the use of clean energy, and possesses the infrastructure for green hydrogen production and export projects, in addition to the presence of attractive incentives for investors in this field, which makes Oman to be one of the largest producers of green hydrogen in the world by 2030.
This serious endeavour culminated in the Royal Directives of establishing the Oman Sustainability Centre to ensure the implementation of the National Zero Neutrality Plan.
The current year also witnessed the issuance of a number of laws governing the legislative framework for economic affairs in the Sultanate of Oman and supporting the continuation of the economic growth momentum.
Some of the laws issued this year include the Social Protection Law, the Labour Law, the Public Debt Law, and the Tourism Law in addition to the Social Protection Fund system.
The Undersecretary of the Ministry of Economy further confirmed that these laws are directly related to economic affairs and represents a fundamental driver in economic development with the government’s attention reflecting the serious work to achieve the national goals associated with the ‘Oman Vision 2040.’
This current year also witnessed the opening of a number of important projects under the patronage of His Majesty Sultan Haitham bin Tarik.
This includes the Royal Academy of Administration specialising in preparing and developing Omani cadres in the government and private sectors. The Oman Across Ages Museum, under the Ministry of Interior, is a world-class entity that preserves cultural heritage and highlights the unique character of the Sultanate of Oman. In addition the Sultan Haitham City was also inaugurated. The proposed city is considered a model for future cities in the Sultanate of Oman and an attractive and investment destination.
Dr Al Maawali pointed to other strategic initiatives and projects that it hoped will have a positive impact on economic activity and improving the standard of living of the citizens.
During the current year a number of initiatives and projects were taken. Most notably among them were the establishment of Khazaen Economic City in the South Al Batinah Governorate, and the establishing of an integrated sports city project that would attract hosting tournaments and competitions at the regional and global levels.
Also the opening of the strategic ‘Rabt’ project (Phase I) being implemented by the Oman Electricity Transmission Company (OETC), and the announcement of the launch of the Oman Future Fund at the end of May 2023 with a capital of OMR2 billion within the framework of the ongoing efforts of the Omani Investment Authority (OIA) towards promoting economic diversification and empowerment of private sector, supporting small and medium enterprises (SMEs) and attracting foreign investment.
The Undersecretary of the Ministry of Economy, stressed that the Oman’s economy will continue its growth and enhance its competitiveness, and continue the process of development led by His Majesty to move forward towards a better and more welcoming future.
-With inputs from ONA
