Dr. Saeed bin Mohammad al Saqri, Minister of Economy, said that the policies and measures implemented by the Sultanate of Oman recently have begun to show results.
The economy is expected to grow by about 5.8 percent in 2022 and will continue to record growth rates during the years of the tenth five-year plan along with the gradual improvement in the overall investment climate.
In an interview to Observer’s sister publication, Oman, he said the rise in oil prices led to a significant improvement in the state’s general budget, and had a positive and direct impact on growth in the national economy, whether on the added value of the oil activities sector, or non-oil activities through increased demand. aggregate on other economic activities.
The minister stressed that creating job opportunities for citizens is one of the government’s priorities under the directives of His Majesty Sultan Haitham bin Tarik and that Oman’s vision and the tenth plan programs take into account developments in the labor market.
He said that the partnership with the private sector is a strategic option, and the state will continue its efforts to support the sector through a policy of privatization and the gradual sale of productive assets to the private sector, as well as developing legislation regulating the business and investment environment and reviewing and updating the legal and regulatory framework for private sector activities.
The Ministry has prepared a comprehensive study recently, to evaluate the economic stimulus packages, whose size is estimated at about RO4.1 billion. The results showed the success of the policies and measures that were taken in general in avoiding potential closures and bankruptcy for many small and medium enterprises, and they had a noticeable positive impact in reducing the financial burden on institutions and individuals, enhancing social stability, and helping to overcome the difficult circumstances imposed by the pandemic.
The decline of the Covid-19 pandemic has led to a gradual return to global economic activity, and to an increase in total oil demand by about 6 million barrels per day during the current year compared to 2020.
Demand for oil
It is estimated that an additional rise in oil demands next year by about 4.2 million barrels per day, bringing the total Global demand to 100.8 million barrels per day. “Of course, the increase in demand led to a significant increase in oil prices from their low levels at the beginning of 2020 as a result of the pandemic and its repercussions on the global economic and trade movement.”
This rise in oil prices constitutes a good development for oil-exporting countries, as it reflects positively on government revenues or on economic growth, especially in the sectors of oil activities, but the significant rise in oil prices may also lead to higher production costs, especially in oil-importing countries and affecting their ability of countries to restore economic growth rates in general.
For the Sultanate of Oman, the rise in oil prices led to a significant improvement in the general budget, as the deficit decreased during the period from January to August 2021 by 46.3% from its level during the corresponding period of 2020.
This came mainly as a result of an increase in total government revenues by about 13.9 percent at the end of August of this year compared to the same period in 2020, as net oil revenues rose during that period by about 17.8 percent, constituting about 64.3 percent of the increase in total government revenues.
The impact of high oil prices on growth in the Omani economy is positive and direct on the added value of the oil activities sector, and indirectly on non-oil activities through an increase in aggregate demand in other economic activities.
Initial estimates indicate growth of GDP at current prices by about 10.1% during the first half of this year, compared to the same period in 2020, supported by the growth of the oil sector by about 8.7%, and the growth of non-oil activities by about 11.1 percent during the same period.
It is expected that the GDP growth rate for the year 2021 as a whole will rise above this rate as a result of the continued rise in oil prices significantly in the past few months from their levels at the beginning of the year, while the real GDP contracted by about 2.8 percent in the year 2020, it is expected that the rates of Positive growth of about 1.6 percent and 5.8 percent in 2021 and 2022, respectively.
