Oman’s nominal GDP declined by 5.1 per cent in 2016 on the back of a steep decline in revenues from the hydrocarbons sector, according to preliminary national accounts data released by the Central Bank of Oman.

The sultanate’s economy declined by 13.8 per cent in 2015 as low oil prices began to have a major impact on economic growth.

According to the latest data, revenues from the hydrocarbons sector declined by 23.7 per cent in 2016, while the non-hydrocarbons sector witnessed tepid growth of 0.6 per cent, with manufacturing, wholesale and retail trade adversely affected. Non-oil growth mainly came from sectors such as construction, agriculture, fishing and real estate services.

Inflation in the sultanate rose to 1.9 per cent for the first half of the year due to increases in transport, education and energy prices.

The Central Bank of Oman’s financial stability report, published in August, indicates the sultanate’s real GDP stood at about 5.7 per cent in 2015. The IMF and World Bank have estimated Oman’s GDP growth in 2016 to have reached 3.05 per cent and 2.2 per cent respectively.

Although Oman is one of the smaller oil producers in the Gulf, oil revenues still account for almost half of its GDP. The sultanate has sought to diversify its dependence on hydrocarbons revenues by undertaking massive infrastructure and logistics projects in port cities such as Duqm, Salalah and Sohar.