- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 05:23 06:41 12:10 15:09 17:32 18:50
A sharp decline in oil prices depressed Oman's economy by more than 20 per cent in current prices last year despite positive real growth triggered by an increase in crude output, official data showed yesterday.
From RO23.2 billion (Dh222.7bn) in 2008, the Gulf country's nominal gross domestic product slumped to about RO18.5bn in 2009, a decline of around 20.2 per cent, the Ministry of National Economy said.
"The decline was caused mainly by the large decrease in oil prices last year following the eruption of the global financial crisis," it said.
The fall allied with an increase in the country's population to depress Oman's GDP per capita income to around RO6,000 in 2009 from nearly RO8,000 in 2008, the figures showed.
The Ministry gave no breakdown for the GDP but its data for the first nine months of 2009 showed the nominal GDP grew by around 17.4 per cent in the third quarter compared with a contraction of 1.3 per cent in the second quarter and a plunge of nearly 25.8 per cent in the first quarter.
The change in the GDP was affected mainly by fluctuations in the oil sector, which dived by around 22.3 per cent in the first quarter before recovering by nearly two per cent in the second quarter and 14.9 per cent in the third quarter because of rebounding prices and higher output by the Sultanate.
"Year on year oil production increased by nine per cent in the third quarter of 2009, while output throughout the year until September grew by nearly 7.1 per cent compared with the same period of 2008. This means the GDP growth from the oil sector in constant prices will be positive in 2009," the Ministry said.
Oman has been locked in a drive to restore oil production to its level 10 years ago, when it was higher than 800,000 barrels per day. Official figures showed output grew by around seven per cent to an average 810,000bpd in 2009 from just over 750,000bpd in 2008. Higher oil production along with record public spending boosted Oman's real GDP by 3.7 per cent in 2009 despite the downward pressure of the global fiscal distress, according to Minister of National Economy Ahmed Mecki.
Growth in 2009 was higher than the three per cent GDP increase forecast previously by the International Monetary Fund and far above the level of just 0.15 per cent recorded in neighbouring Saudi Arabia, the world's oil superpower.
But it was much below the 14 per cent surge achieved in 2008, when the economy of Oman and most other oil producers raced at one of their quickest paces because of a surge in crude prices and high oil output.
Like neighbouring Gulf nations, Oman has approved a record budget for 2010 as part of counter-crisis fiscal stimulus measures aimed at supporting the country's financial sector and maintaining growth in the domestic economy.
Expenditure for 2010 was put at a record RO7,180m, nearly nine per cent above the 2009 budget. Revenues were projected at RO6,380m, leaving a deficit of RO800m, slightly lower than the RO810m shortfall budgeted in 2009.
Quoted by local newspapers, an Omani Ministry of Economy official said the country's economy has remained strong despite the crisis, adding that the next five-year development plan would focus on diversification of sources of income, attracting investment, attaining good growth rates, curbing inflation, increasing spending on infrastructure projects and expanding oil and gas production.
"It will also concentrate on expanding the private sector so it can contribute more to the industrial strategy, which will get priority in the next five-year plan…emphasis will also be given to development of small and medium enterprises as part of the economic diversification programme," said Medhi Al Abdowani, Planning Director at the Ministry.
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.
Follow Emirates 24|7 on Google News.