Oman's economic growth hits slowest rate since 2009

Sultanate's economy grows by 2.8% in nominal terms during 2013, according to new data
Oman's economic growth hits slowest rate since 2009
By Reuters
Sun 04 May 2014 02:59 PM

Oman's economic growth plunged to 2.8 percent in nominal terms in 2013, its slowest pace of expansion since 2009, as output in the key oil sector shrank, data showed on Sunday.

The Gulf Arab sultanate's economy had grown 11.5 percent at current prices in 2012. That figure was revised upwards from a previously estimated 10.8 percent after the National Centre for Statistics & Information revisited its 2011 data.

Oman does not regularly release inflation-adjusted GDP data.

In April, the International Monetary Fund estimated in its World Economic Outlook that the non-OPEC crude exporter's economy expanded 5.1 percent in 2013 when adjusted for inflation, slightly outperforming a 5.0 percent rise in 2012.

Analysts polled by Reuters in January expected real GDP growth of 4.5 percent in 2013 and 4.0 percent in 2014.

If confirmed by readings of GDP at constant prices, the slowdown would underline the government's main challenge of creating enough jobs for the country's growing population of nationals, currently 2.2 million.

Under the leadership of Sultan Qaboos bin Said, Oman has been transformed since 1970 from an impoverished backwater to a modern economy.

Oman ramped up state spending by more than 27 percent between 2013 and 2011, when it faced protests demanding jobs and an end to corruption following social and political unrest across the Middle East. It also created tens of thousands of new government jobs.

As a result, the country, which lacks the vast oil wealth of neighbouring Saudi Arabia and the United Arab Emirates, may see its public finances slip into a deficit of 3.0 percent of GDP as soon as next year, deepening to as much as 11.4 percent of GDP in 2019, the IMF forecast last month.

Oman's central bank chief told Reuters last month that the economy should grow 4 to 5 percent this year, underpinned by stable oil prices and the billions of dollars spent on major projects in the past two years.

Last year's slowdown in nominal growth was mainly due to a 1.4 percent fall in the oil sector, which accounts for nearly 46 percent of Oman's $80 billion economy and had seen a 10.7 percent jump in nominal terms in the previous year.

Oil production rose 2.3 percent to 343.8 million barrels in 2013, slower than a 4.1 percent rise a year before, while the average price at which Oman sold its crude dropped to $105.5 per barrel from $109.6 in 2012.

Services, the second largest contributor to GDP, with a 37 percent share, also saw growth slow to 10.0 percent from 15.1 percent in 2012, the data showed.

Growth in industrial output, which accounts for nearly 18 percent of the economy, halved to 2.8 percent last year from 5.5 percent in 2012.

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