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Oman has endorsed a new five-year development plan that aims to achieve real GDP growth of three per cent annually and keep inflation under control following a sharp rise during the pre-crisis oil boom period.
Sultan Qaboos bin Saeed ratified the eighth plan at the start of 2011 to kick off one of the Gulf country’s largest development schemes targeting massive investments and intensification of plans to diversity its oil-reliant economy.
The Sultan also endorsed the 2011 budget, which forecast spending at a record high RO8.13 billion and revenue at RO7.28 billion, leaving a deficit of RO850 million, nearly four per cent of the estimated 2011 GDP.
“The plan aims to achieve minimum real GDP growth of three per cent a year and ensures inflation will remain at low levels….it will focus on stronger coordination between monetary and fiscal policies to achieve economic stability and on continuation of projects under way with an emphasis on new ventures,” Oman’s official media said on Sunday.
“The plan will also pursue diversification efforts and a drive to expand the country’s oil and gas production and increase hydrocarbon reserves.”
The newspapers, citing a government statement said the 2011 budget was nearly nine per cent higher than the 2010 budget, adding that this year’s budget is based on a record high oil price of $58 a barrel.
In statements last month, Oman’s Minister of National Economy Ahmed bin Abdul Nabi Mecki said real GDP growth in the country’s seventh development plan for 2006-2010 sharply exceeded the targeted rate of three per cent despite the adverse effects of the 2008 global fiscal distress.
His figures showed real GDP growth stood at 5.5 per cent in 2006, around 6.8 per cent in 2007, as high as 12.8 per cent in 2008 and nearly 7.3 per cent in 2009. He forecast growth at around 6.1 per cent in 2010.
“The eighth development plan will concentrate on attaining a growth rate of at least three per cent, boosting exports, encouraging investment and devising a strategy to expand productivity,” he said.
“The plan will also focus on controlling inflation through all its years by developing methods of control on local markets, educating consumers and encouraging importers to diversify the sources of their imports.”
Mecki said priority would also be given to creating jobs for Omanis, developing agriculture and other non-oil sectors and intensifying efforts to develop small and medium enterprises by encouraging the private sector to invest in such projects.
In current prices, Oman’s GDP jumped by nearly 33.9 per cent in the first half of 2010 mainly because of higher production and prices.
The oil sector alone shot up by around 77.1 per cent in the first half of 2010 compared with the first half of 2009 while the non-hydrocarbons sector swelled by nearly 9.7 per cent in the same period.
Oman’s oil production soared to a nine-year high last month to around 875,000 barrels per day while crude prices in the first half of 2010 were more than 30 per cent higher than their average in the first half of 2009.
Higher prices and output allowed the country to maintain its fiscal expansion plan it adopted after the global crisis with the aim of preventing its economy from sliding.
The surge in prices and output boosted Oman’s revenue to nearly RO5,763.7 million in the first nine months of 2010 from around RO4,827.6 million in the first nine months of 2009.
Oil export earnings jumped to about RO3.926 billion from RO3.07 billion in the same period.
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