MUSCAT: Oman’s economy is set to receive a ‘much-needed’ boost from additional revenue due to the rise in prices of oil barrels, according to the country’s investment fund chief economist, Fabio Scacciavillani. The most difficult phase for the economy is coming to an end,” Scacciavillani told the Times of Oman. OPEC agreed to a production cut late last year which allowed the prices to rise, prompting Oman’s crude oil cost to rise above $67 a three-year high for the gulf nation.
“The prices of oil show that the most difficult phase for the economy is coming to an end. If prices remain at $65- $70 levels, the flow of resources in the public coffers will be strong and help the overall economy,” according to the chief economist.
This spike is expected to lessen the deficit as oil prices account for 71 percent of the country’s income. Oman’s recent budget set 2018 oil prices at an estimated $50, 25 percent below the current cost.
“I don’t see any reason why oil prices would decline now. The fundamentals are strong, and as global supply dips and demand increases, there is a synchronized rebound in the oil market. This is expected to stay,” Scacciavillani said.
Confident traders as well as strong global economic growth have driven up demand for oil, sustaining prices at above $60.
