Oman's economy will continue to record positive growth rates in the next few years following a 6.6 per cent expansion in 2011 because of strong oil prices and high public spending, according to a Saudi bank study.
Growth in the coming years will be driven by the non-oil sector, which will be felled by massive infrastructure expenditure of nearly $78 billion, said the study by National Commercial Bank, the Gulf Kingdom's largest bank.
After a sharp slowdown in 2009 at around 1.1 per cent, real GDP growth largely rebounded to four per cent in 2010 and recorded one of its highest levels of 5.5 per cent in 2011, the study said.
Growth is projected at around 3.9 per cent in 2012 but will likely pick up to 4.2 per cent in 2013 before slipping to four per cent in 2014.
Oman's five-year development plan foresees infrastructure projections worth $78 billion
"Robust growth looks set to continue in the coming years. Oman's five-year development plan foresees infrastructure projections worth $78 billion with the total amount of construction spending due to more than double during the period," said the study, sent to Emirates 24/7.
It said that Oman, seeking to foster the private sector, is setting up a Small and Medium Enterprises Development Fund with an initial capital of RO100 (Dh960 million), adding that the capital is provided by local business groups, private pension funds, and other financial institutions.
International Petroleum Investment Company (IPIC) finalized a partnership to build a $6 billion refinery and petrochemicals project in Duqm
At the same time, Oman is also redoubling ongoing efforts to develop its hydrocarbons sector. The report noted that Oman Oil Company and Abu Dhabi-based International Petroleum Investment Company (IPIC) in June finalized a partnership to build a 230,000 b/d refinery and petrochemicals project at Duqm.
The project has an estimated budget of $6 billion and is expected to be completed over five years, it said.
A breakdown showed the country's oil GDP grew by around 3.8 per cent in 2011 and is forecast to expand by one per cent in 2012.
The non-hydrocarbon sector increased by 6.4 per cent and is expected to grow by nearly 4.3 per cent in 2012, the report said.