Oman’s GDP rose 1.9 percent in H1 2024, fueled by 3.6 percent non-oil growth: Central Bank

A report from the Central Bank of Oman (CBO) indicates that Oman's real GDP grew by approximately 1.9% year-on-year in the first half of 2024. This growth was primarily driven by a 3.6% increase in non-oil industries, showcasing the Sultanate's diversification efforts.

The Central Bank of Oman has released its "Macroeconomic Stability Report 2024," a key communication tool published regularly by the bank. The report provides a comprehensive analysis of the Sultanate of Oman's macroeconomic performance, assesses its stability, and considers the most significant risks and vulnerabilities. Furthermore, the report offers forecasts for key economic indicators in the medium term, offering valuable insights.

Despite the impact of global inflation, energy supply disruptions, rising interest rates, and increased uncertainty, the Omani economy has demonstrated resilience in the face of shocks. The report highlights the continued growth in Oman's real GDP and the strengthening of economic activity, even amidst volatile oil prices and pressures on the global economy, reflecting sound economic policies.

The contribution of oil-related industries remains significant, accounting for approximately 32.5% of total real GDP in the first half of 2024. This underscores Oman's economy's notable vulnerability to external shocks, particularly fluctuations in energy prices and global oil supply and demand dynamics. Oman's medium-term economic outlook remains positive, with economic activity projected to continue its recovery and expansion, aligning with national priorities and emerging economic opportunities.

Regarding public finances, the report highlights the government's initiatives in fiscal reforms, including expenditure rationalization, reduction of public debt, and diversification of revenue sources. These measures demonstrate the Sultanate of Oman's proactive stance in strengthening its economic and financial foundations, paving the way for sustainable growth.

The launch of the social protection program provides a balanced strategy for addressing social security needs while ensuring long-term fiscal sustainability. Despite the decline in the average price of Omani crude oil in 2024 compared to 2023, Oman's diversification efforts have positively impacted the reduction of risks associated with oil price volatility. This emphasizes the need for further investment in non-oil industries to enhance their contribution to economic activity and diversify national income sources.

These reforms have been recognized by credit rating agencies, leading to upgrades in the Sultanate of Oman's sovereign credit ratings. This rating improvement underscores the confidence of international institutions in the country's fiscal policies and the momentum of economic reforms, signaling a positive trajectory.

In terms of monetary stability, the report emphasizes that the total foreign exchange reserves held by the Central Bank of Oman remain stable, at approximately 7.5 billion Omani Rials. As of September 2024, this level of reserves is sufficient to cover approximately 6.6 months of merchandise imports, compared to an international benchmark of 3 months. The report highlights the continued importance of maintaining adequate foreign exchange reserves to ensure the stability of the exchange rate regime.