(MENAFN- Muscat Daily) The World Bank projects Oman's gross domestic product to grow five per cent this year well above its 3.3 per cent average growth forecast for GCC countries.
The World Bank's estimates are in line with the Oman government's expectations announced in this year's budget. The Bank however forecast Oman's GDP growth to weaken to 3.9 per cent in 2016 and four per cent in 2017.
According to the World Bank Group's Global Economic Prospects 2015 report released last week the sultanate's economy grew by an estimated 4.4 per cent in 2014 down from 5.1 per cent in the previous year. Saudi Arabia's economy is estimated to grow by 4.1 per cent in 2015 down from 5.2 per cent last year.
The biannual report says Oman's current account balance dropped sharply to three per cent of GDP in 2014 from 9.2 per cent in 2013 and is expected to fall further into negative territory (-4.9 per cent) next year.
The World Bank estimates Oman's fiscal break-even oil price for 2015 to be well above US$100 per barrel and slightly more than last year's break-even price.
Oman crude closed Friday's trading on the Dubai Mercantile Exchange (DME) at US$45.14 per barrel.
The global economy is still struggling to gain momentum while many large developing economies are less dynamic than in the past the report said. As a result the World Bank cut its growth forecast for the global economy. After growing by an estimated 2.6 per cent in 2014 the global economy is projected to expand by three per cent this year and 3.3 per cent in 2016 the report predicts.
'In this uncertain economic environment developing countries need to judiciously deploy their resources to support social programs with a laser-like focus on the poor and undertake structural reforms that invest in people' said World Bank president Jim Yong Kim in a press release.
'It's also critical for countries to remove any unnecessary roadblocks for private sector investment. The private sector is by far the greatest source of jobs and that can lift hundreds of millions of people out of poverty' he added.
The World Bank report said that oil prices are expected to remain low in 2015 and rise only marginally in 2016.
It said that following years of turmoil some economies in the Middle East and North Africa (MENA) region appear to be stabilising although growth remains fragile and uneven. 'Risks from regional turmoil and from the volatile price of oil are considerable. On other hand lower oil prices offer an opportunity to remove the region's heavy energy subsidies both in oil-importing and oil-exporting countries alike.'
In virtually all oil-exporting countries in the region fiscal deficits have emerged or widened as production declined in the first half of 2014 with some recovery in the second half the report added.
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