Supported by easing fiscal adjustment, infrastructure investment and reforms to promote non- oil sector activity, GCC economies, including Oman, are anticipated to record stronger growth this year, the World Bank said.
The World Bank projects Oman’s economic growth to pick up to 2.3 per cent in 2018, better than the average two per cent growth forecast for GCC countries as a group this year. The World Bank estimates showed that Oman’s economy has recorded a 0.7 per cent growth in 2017. According to Oman’s 2018 budget statement which was released earlier this month, the sultanate’s government expects the economy to grow by a minimum three per cent in 2018.
‘The GDP growth is projected to be positive at a rate of at least three per cent in 2018. This is driven by oil price recovery and efforts to diversify the economy and improve investment climate’, the budget statement had said. The World Bank said that strengthening private consumption and investment are anticipated to support stronger growth in the region.
‘GCC economies are anticipated to lead stronger growth in the region, supported by easing fiscal adjustment, infrastructure investment and reforms to promote non-oil sector activity. Growth among the GCC countries as a group is forecast to pick up to two per cent this year from 0.7 per cent in 2017,’ the World Bank said in its Global Economic Prospects 2018 report. It said the 2017 slowdown in the region was driven by oil production cuts, fiscal consolidation and continued geopolitical tensions.
The World Bank expects fiscal balances in the region to improve further over 2018-2020, reflecting plans for reducing subsidies and tax increases in many economies, as well as the effects of somewhat higher oil prices on revenues. However, the bank warned that the weaker-than-expected oil prices would cloud growth prospects for the region’s oil exporters.
‘While the impetus for reforms has gained momentum in the region, the uncertainty regarding the scope, depth and sustained nature of these reforms may limit their positive impact.’ The World Bank forecasts Oman’s GDP growth at 2.5 per cent for 2019 and 2020.