Oman's nominal GDP slumps 14 in 2015 as weak oil trims revenues

5/1/2016 2:49:31 PM

(MENAFN- Muscat Daily) Muscat-

Oman's nominal GDP - gross domestic product at market prices - fell sharply in 2015 with lower oil prices taking the lion's share of the blame.

Oman's GDP dropped 14.1 per cent to RO27bn in 2015 compared with RO31.45bn in the previous year according to the statistics released by the National Centre for Statistics and Information (NCSI). Despite a four per cent increase in oil production the value of the sultanate's petroleum activities or oil GDP plummeted 38.2 per cent to RO9.16bn in 2015 from RO14.84bn in the previous year.

Average oil production rose four per cent to 981100 barrels per day in 2015 from 943500 barrels per day in 2014. The average price at which Oman sold its crude plunged 45 per cent to US$56.5 per barrel from US$103.2 per barrel in 2014.

The International Monetary Fund (IMF) recently revised down its forecast for Oman's economic growth this year amid a continued rout in the global oil market. IMF expects the sultanate's real GDP to grow by 1.8 per cent in 2016 a percentage point down from 2.8 per cent it had previously forecast in October last year.

However despite a sharp decline in oil GDP Oman's non-oil GDP grew by 2.3 per cent to RO19.37bn in 2015 mainly supported by robust activity in the construction and services sectors NCSI data showed.

The services sector which accounted for nearly 49 per cent of Oman's total GDP expanded 3.1 per cent to RO13.21bn from RO12.81bn. Among services activity wholesale and retail trade fell 2.6 per cent to RO2.03bn while transport and communication increased by 3.9 per cent to RO1.64bn. Financial intermediation and real-estate services sectors grew by 5.5 per cent and 4.6 per cent respectively.

Industrial activity witnessed a marginal increase of 0.4 per cent to RO5.73bn accounting for 21 per cent of Oman's total nominal GDP in 2015.

Of the total industrial output manufacturing recorded a 6.7 per cent decline at RO2.94bn while construction sector grew 8.6 per cent to RO2.23bn. Mining and quarrying grew by 13.8 per cent and electricity and water supply recorded an 11 per cent rise.

In its economic outlook released last week the IMF said oil export receipts of the Middle East and North Africa oil exporters dropped by US$390bn in 2015. The Fund said the outlook for lower oil prices implies weak oil revenues for years to come dramatically reducing the capacity of governments to spend.

It said growth in the GCC is now expected to slow more sharply because of tighter fiscal policy weaker private sector confidence and lower liquidity in the banking system.

'The ample surpluses of the GCC countries have turned into significant deficits projected to average 12.75 per cent of GDP in 2016 and remain at seven per cent over the medium term despite the implementation of sizable deficit-reduction measures' IMF added.

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