Oman's GDP booming on oil revenue
On the back of higher oil prices and increased domestic demand, the sultanate's nominal gross domestic product (GDP), or GDP measured at current market prices, grew by 13.1 per cent during the first nine months of 2012. Oman's nominal GDP reached RO22bn in the first nine months of 2012 compared to RO19.47bn recorded in the same period of 2011, the latest data released by National Center for Statistics and Information (NCSI) showed.
Oil and gas sector activities, being the biggest contributor to the Omani economy, grew by 11.2 per cent to RO11.49bn in the nine months period against the same period in the previous year, mainly due to the higher oil prices in 2012 as compared in 2011. Services sector activities, the second biggest contributor to the Omani economy, witnessed a robust 16.3 per cent growth to reach at RO8.14bn from RO7bn in the same period in 2011.
In the services sector, wholesale and retail trade, boosted by the increase in domestic demand, grew by 16.5 per cent to RO1.74bn in the nine months period. “During the year 2012, the Omani economy continued its growth momentum aided by high crude oil prices and sustained domestic demand, supported by large public expenditure and accommodative monetary policy pursued by the Central Bank of Oman,” CBO said in its monthly bulletin released on Thursday.
Industrial activities in Oman amounted to RO3.22bn in the first nine months of 2012, which was 6.6 per cent higher compared to the same period in 2011. Among the industrial activities, manufacturing grew by 7.5 per cent to nearly RO2bn from RO1.85bn a year ago, while the construction sector witnessed a 4.2 per cent growth to RO946mn. A source at the Ministry of Finance said that apart from the higher oil prices helping the economy, the year 2012 also witnessed the full impact of new jobs and salary hikes, which started in 2011, in terms of increased domestic demand.
He said, “Enhanced level of incomes also allow people to get credit from banks which in turn increases consumption. Domestic demand continues to grow as people are getting more money to spend. The services sector has largely benefited from job creation, higher salaries and government spending.” He added that government spending on infrastructure projects is adding to the performance of construction, services and other related sectors.
“I believe Oman has got such a fiscal strength that this growth will easily continue for next four to five years. Foreign direct investment in the country is also growing which shows the confidence of foreign investors in Omani economy,” he said. “The government's emphasis on development of small and medium enterprises (SMEs) is a very good step and that could be a huge contributor to the economic growth,” added the source.
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