MUSCAT: The Omani economy is doing fine in the ongoing environment of continuing socioeconomic challenges. What’s more, multinational agencies are projecting improved performances in the medium-term for the sultanate on the assumption of stronger oil prices.
Also, the preliminary projections for 2018 budget assume stronger revenues, though with little change to the size of the budgetary deficit. However, higher economic growth should contribute to reducing the full impact from such a deficit.
Oil prices sank in mid2014 on the back of strong supply in the global markets. A primary contributor was the boom in shale oil production in the US. Tech advances boosted US output from the US and thereby allowing for a reduction in production costs and helping with the feasibility to produce more.
Now, prices are undergoing steady increases thanks in part to efforts by Opec members to cut production. The same can be said of non-Opec countries such as Russia. Oil has been averaging $55 per barrel in recent months, a departure from the levels in mid2014 and 2015.
Economic growth for Oman is expected to show improved numbers in 2018. The World Bank is projecting a real GDP growth level of 3.4 per cent in 2018 from the negligible levels in 2017. This should come about despite the possible rise of inflation rate, from 2 per cent in 2017 to 2.6 per cent.
