Oman’s economy will continue to achieve further growth in 2024

Muscat: Omani economy is likely to maintain its further growth in 2024 on the back of the authorities pursuing flexible economy that responds to global changes, according to the Undersecretary of the Ministry of Economy.

HE Dr. Nasser bin Rashid Al Maawali, Undersecretary of the Ministry of Economy, said that the current year concludes with a qualitative improvement in the performance of the Oman’s economy, positive and reassuring indicators confirming the success of the economic and financial policies taken, and there are expectations that the Omani economy will continue to achieve further growth in the year 2024 due to flexible economy policies that responds to global changes, as well as adopting stimulating economic policies, and working on continuous improvement in various sectors.

He added that there is noticeable progress in the performance of the Omani economy for the year 2023 as evident in the performance of the state’s public finances, improvement in the credit rating, in addition to the positive growth and economic indicators.

His Excellency indicated that the Oman’s gross domestic product (GDP) at constant prices grew by 2% to reach about RO 26.4 billion by the end of the Q3 of 2023, compared to RO 25.9 billion during the same period in 2022, despite the decline in oil production by 0.9%.

He further pointed out that during 2023, the Sultanate of Oman witnessed many developments and achievements that had a positive impact in improving the performance of the Omani economy, improving the citizen’s standard of living, and ensuring the sustainability of providing them with decent livelihoods. In line with national priorities, the objectives of the tenth five-year development plan, and the strategic directions of “Oman Vision 2040”.

He stated that at the level of economic activities, in the value of oil activities at constant prices increased by 0.5% to constitute 34.3% of the gross domestic product until the end of the third quarter of 2023, while the added value of non-oil activities grew by 2.7%, constituting 68.8%.

He attributed this to the increase in the value addition of non-oil activities with growth in most economic activities, ranging between 26.8% for communications and information activity, and 0.6% for accommodation and food services activities. On the other hand, construction, manufacturing, financial, and insurance activities recorded a decline of 5%, 2.6%, and 9%, respectively.

Regarding the general level of prices, HE Dr. Nasser Al Maawali, confirmed that the proactive government measures in 2023 contributed to protecting the Omani economy from inflation and maintaining it within safe limits, as the Sultanate of Oman was able to maintain inflation rates according to the consumer price index (CPI) within acceptable and safe limits and in a way that ensures Avoiding negative repercussions on the standard of living of citizens, as the inflation rate reached about 1.03 percent during the period (January – November) of 2023, compared to 2.9 percent during the same period of 2022.

It should be noted that monthly inflation rates have tended to decline since the beginning of 2022. It declined from 4.4 percent in January 2022 to about 0.6 percent in November 2023. This is due to government measures and policies taken to mitigate the severity of inflation, the most important of which is stabilizing fuel prices according to monthly prices and support for basic foodstuffs, in addition to the decline in global prices, especially for food commodities.

In terms of public financial performance, Dr. Nasser Al Maawali, stressed the continued improvement of the financial situation during the year 2023, despite the significant decrease in public revenues amounting to 17.4 percent to reach about RO 9.8 billion until October 2023 due to the decline in average oil prices to reach USD 81 per barrel.

Public spending decreased by 15.8 percent, reaching about RO 9 billion as a result of the continued implementation of financial control measures, which led to the state’s general budget achieving a financial surplus of RO 830 million, compared to a financial surplus of RO 1.21 billion in the same period in 2022.

Dr. Nasser Al Maawali, explained that the improvement in the performance of the general budget, in addition to the improvement in the management of the lending portfolio, led to a decrease in the total public debt of the Sultanate of Oman by about RO 1.3 billion, or 7.4 percent from its level at the end of 2022, to reach about RO 16.3 billion at the end of October 2023

Al Maawali pointed out the improvement in the credit rating of the Sultanate of Oman by the leading international rating institutions, which issued their assessment in 2023 on the Sultanate of Oman, as Fitch agency had raised its credit rating for the Sultanate of Oman in September 2023 to BB+ with a stable outlook, with Standard & Poor’s” issuing its credit rating for the Sultanate in September 2023 to BB+ with a stable outlook as well.

Likewise, Moody’s raised its credit rating in May 2023 to Ba2 while maintaining its positive outlook, as a result of the improvement in public financial performance indicators and the continued implementation of financial control measures and initiatives and a decrease in public debt.

Al Maawali further stressed that the improvement in the credit rating of the Sultanate of Oman will reflect positively on creating an attractive environment for investment, attracting the largest number of qualitative foreign investments, and improving the image of the Oman’s economy with international organizations, the data of which investors rely on to decide whether or not to invest in a particular country.

He pointed out that the Tenth Five-Year Development Plan, since three years after its implementation, is proceeding according to the time-line set for it, and accelerating the achievement of the goals of “Oman Vision 2040,” explaining that the gross domestic product(GDP) at current prices reached RO 31.4 billion by the third quarter of 2023, i.e. It exceeds the target estimated within the plan at RO 30.1 billion, and the growth rate for non-oil activities reached 2.7 percent, which is close to the planned 3 percent.

He stressed that “the inflation rate is reassuring and is still within safe and reasonable limits. The inflation rate has reached 1.03 percent until November 2023, while according to this year’s plan, it is planned to reach 3.4 percent.”

Regarding the executive position of the strategic programmee of the Tenth Five-Year Development Plan, he explained that 85 percent of the programme are being implemented, equivalent to 367 of the 430 strategic programme.

As for the economic diversification sectors in the plan, he stated that the agriculture, tourism and mining sectors achieved growth rates that exceeded the plan for this year, which are respectively 1.4 percent, 1.8 percent and 0.7 percent, compared to the planned 1.2 percent, 1 percent and 0.6 percent, while the  industries growth rate of the manufacturing, transportation and logistics services sector is still far from the plan for the year 2023, while the education and fisheries sectors reached 0.9 percent growth, respectively, compared to the planned one percent, and 4.8 percent compared to the planned 4.9 percent.

Regarding the National Program for Economic Diversification, he said that through the work of the program in the first phase and relying on strategic tools, the program came out with a package of proposed policies and executive initiatives to contribute to solving challenges and strengthening the productive base in the economic sectors by focusing on the interrelationships between the specific sectors, which are: clustering. The integrated economic cluster in the Al Dakhiliyah Governorate, the integrated economic cluster in the Shalim region, the integrated economic cluster in the Al Najd region, in addition to the cold chain economic cluster in Duqm, and the integrated economic cluster in the Sohar region.

He confirmed that the program completed an analysis of the value chains of the five economic clusters related to economic diversification sectors in cooperation with the Industrial Innovation Academy, where the most prominent challenges and opportunities related to them, and investment opportunities related to these clusters, were monitored and the most prominent ones and potentials were framed, indicating that the program proposed appropriate governance for these clusters.

He conducted a number of field visits to the proposed sites for these clusters to meet directly with the relevant authorities and learn about the existing efforts and progress of work, in addition to coordinating with the implementing agencies and supporting these outputs and working with them to develop preliminary plans for implementation. After the approval of these outputs by the Council of Ministers in their final form, the program will prepare Indicators to measure performance and follow up on implementation of these outputs. The program will assume the role of evaluation and follow-up, and the implementing agency will develop and implement these outputs.

Dr. Nasser Al Maawali further drew attention to the tireless efforts made by the government to the renewable energy sector and to achieve a green economy that responds to national needs and is consistent with global trends, stressing that the Sultanate of Oman is moving forward at an accelerated pace in the field of hydrogen and renewable energy. Six world-class hydrogen projects were recently agreed upon at the “Green Hydrogen Summit Oman, at an estimated cost of US$38 billion in the Al Wusta and Dhofar Governorates, and when operational by 2030, these project aims to produce about one million tons of green hydrogen annually.

Dr. Nasser Al Maawali also stressed that the Sultanate of Oman is at the forefront of countries in the use of clean energy, and possesses the infrastructure for hydrogen production and export projects, in addition to the presence of attractive incentives for investors in this field, which makes Oman to be one of the largest producers of green hydrogen in the world by 2030. This serious endeavor culminated in the Royal Directives of establishing the Oman Sustainability Center to ensure the implementation of the National Zero Neutrality Plan.

The year 2023 also witnessed the issuance of a number of laws governing the legislative framework for economic affairs in the Sultanate of Oman and supporting the continuation of the economic growth momentum in this year, most notably: the Social Protection Law, the Labor Law, the Public Debt Law, and the Tourism Law in addition to the Social Protection Fund system.

He confirmed that these laws are directly related to economic affairs and represents a fundamental driver in economic development, with the government’s attention reflecting the serious work to achieve the national goals associated with the “Oman Vision 2040.”

This year also witnessed the opening of a number of major projects under the patronage of His Majesty Sultan Haitham bin Tarik- namely the Royal Academy of Administration specialized in preparing and developing Omani cadres in the government and private sectors in line with the paths of the new economy. The Oman Across Ages Museum, under the Ministry of Interior, is a world-class entity that preserves the cultural heritage and highlights the unique character of the Sultanate of Oman, in addition to the inauguration of Sultan Haitham City, which is considered a model for future cities in the Sultanate of Oman and an attractive and investment destination.

He pointed to other strategic initiatives and projects that it is hoped will have a positive impact on economic activity and improve the citizen’s standard of living.

During 2023, a number of initiatives and projects were taken, most notably the establishment of Khazaen Economic City in the South Al Batinah Governorate, and the establishing an integrated sports city project that would attract hosting tournaments and competitions at the regional and global levels. Also the opening of the strategic “Rabt” Phase 1 project being implemented by the Oman Electricity Transmission Company (OETC), and the announcement of the launch of the Oman Future Fund (OFF) at the end of May 2023 with a capital of RO 2 billion within the framework of the ongoing efforts of the Omani Investment Authority (OIA) towards promoting economic diversification and empowerment of the private sector, supporting small and medium enterprises (SMEs), and attracting foreign investment.

Dr. Nasser Al Maawali, stressed that the Omani economy will continue its growth and enhance its competitiveness, and continue the process of development led by His Majesty Sultan Haitham bin Tarik to move forward towards a better and more welcoming future.    – ONA