Oman growth projected at 5.5 per cent for 2014

20 May 2014

Government spending drives non-oil growth

The IMF is projecting economic growth in Oman of about 5.5 per cent in 2014 following a two-day government workshop in the sultanate in early May.

In a statement issued following the workshop, the IMF said real GDP growth was 5.5 per cent in 2013 and is set to remain at this level in 2014.

“Fiscal and external sectors are estimated to have posted surpluses in 2013 at over 5.5 per cent and around 10 per cent of GDP, respectively,” the statement said. “Fiscal and external surpluses are expected as well in 2014, though of lower magnitude.”

“The public investment program is expected to help maintain non-hydrocarbon growth around 5.0 per cent over the medium term. The banking system remains profitable and stable, with an average return on assets of 1.6 per cent, return of equity of 11 per cent, capital adequacy ratio of 16.2 per cent, and gross nonperforming loans of 2.1 per cent as of December 2013.“

Selected Oman economic indicators, May 2014
 20132014
Real GDP growth (%)5.55.5
Real non-oil GDP growth (%)55
Budget surplus (as % of GDP)5.5 
Trade surplus (as a % of GDP)10 
 
Banking sector indicators  
Average return on assets (%)1.6 
Return of equity (%)11 
Capital adequacy ratio (%)16.2 
Gross non-performing loans (%)2.1 
Source: IMF

The workshop was part of the IMF’s work to support Muscat in delivering its structural economic reform programme including its government finances through a reduction in energy subsidies and introducing a new budgetary framework to stabilise fiscal policy and support macro-economic stability.

Oman’s budget surplus is forecast to fall to zero in the next couple of years.

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