MUSCAT: Economic growth in Oman is expected to accelerate this year and next, as the biggest Middle Eastern oil producer outside Opec boosts oil and gas exports, BMI Research said.
Real gross domestic product – GDP adjusted for inflation – is projected to expand by 3.2 per cent in 2018 and 3.6 per cent in 2019, from an estimated 0.6 per cent last year, BMI, a unit of Fitch Ratings said in a report released on Thursday. However, the outlook from 2020 and beyond is more bearish on oil and gas output and real GDP is expected to moderate, unless the sultanate makes new oil and gas discoveries, it said.
“We expect Oman to see a substantial uptick in real GDP growth over the coming quarters, on the back of rising hydrocarbon sector output,” BMI said. “Oil and gas production gains will facilitate an increase in exports, as well as government revenue, which in turn will have knock-on effects on government consumption, fixed investment and private consumption.
BMI forecasts an average Brent price of $75 per barrel in 2019 and $67 in 2018, which are both higher than $54 per barrel in 2017. It expects 2018 will mark the end of Opec-stipulated oil supply cuts, facilitating an uptick in production levels for producers such as Oman.
Moody’s Investors Service this week downgraded the long-term issuer and senior unsecured bond ratings of Oman by a notch to Baa3. The agency cited larger fiscal deficits and the ongoing weakening of its economy due to subdued growth in the coming years.
