Nominal GDP Up 16 Percent in Oman’s Opening Half of the Year
Oman’s nominal GDP data, figured with current market prices, rose by 16.2 percent during the first six months of 2012, moving from RO 13.08bn in H1 2011 to RO 15.2bn in H1 2012, according to data recently released by NCSI.
The budget surplus in Oman grew by RO 2.9 billion from January to September of 2012, substantially higher than the growth of RO 906 million reported in the same period of 2011.
Supported by higher oil price levels and greater activity in the sector, GDP from oil increased 19.9 percent over the first six months of the year, moving from RO 6.56 billion to RO 7.86 billion. Total output in non-oil sector also grew by 12.6 percent, hitting RO 8.18 billion.
The average sale price of Omani crude for this period was $109 a barrel, according to a Ministry of Finance official. The official also stated that higher budget surplus levels and greater GDP resulted from increased prices and enhanced production, when compared to the previous year.
In 2011, Omani crude oil sold for $102.95 a barrel on average (US dollars).
Net revenue from Omani oil increased by 27 percent from January to September, reaching RO 8.11 billion, with gas revenues climbing to RO 1.22 billion, a 52 percent jump.
OIF’s chief economist, Dr Fabio Scacciavillani, noted that although GDP expansion is supported by increased oil prices, both the oil and non-oil economic sectors are expanding the economy.
Oman has followed a stable path of economic policy since the beginning of the worldwide financial meltdown, and that path has paid off. Oman has remained resistant to the effects of the global crisis.
Growth in the sultanate’s GDP and positive fiscal performance indicate the competence and prudence of Oman’s fiscal policies, which have also spurred on growth and encouraged employment when combined with investments in infrastructure.
Dr Scacciavillani noted that there are no indications of deterioration, with Oman headed down a steady path that is expected to extend into 2013. Continued GDP improvement and enhanced fiscal performance within that time are possible.
Robust Economic Fundamentals in Saudi Arabia Set to Support Growth
Economic growth in Saudi Arabia will be driven by development in housing, mortgages, consumer lending and construction, according to Gulf International Bank CEO Yahya Al-Yahya.
Each of these sectors will increase and drive growth over the medium term, stated Al-Yahya. Spending is expected to remain at the existing level, keeping pace with the counter cyclical policy adopted by Saudi Arabia. Oil price fluctuations remain a significant risk, according to the CEO.
Several of the most influential business people from Arab nations were given the task to analyze the region’s business outlook for the coming year, also gathering insight into the economic climate.
More than sixty attended this meeting, including the CEO of PineBridge Investments Middle East, Talal Al-Zain, Al-Zayani Investments Group of Companies chairman Khalid Al-Zayani, Gulf International Bank CEO Yahya Al-Yahya, and KPMG Fakhro managing partner Jamal Fakhro.
The GCC economy is expected to grow by 3.25% next year, according to the IMF. That figure is larger than forecasts for the U.S and Europe, which are forecasted to report 2.1% and 0.2% respectively.
Several investment opportunities exist in the GCC, specifically in the services sector, oil, education and health. Prospects in Bahrain are supported by steady fundamentals and strong reasoning for economic reform that includes diversification, according to Al-Zain.
Al-Zayani also noted the presence of optimism. Growth fundamentals exist in the region, but Al-Zayani stated that all nations must be accounted for, including Iran, Iraq and Syria. Political instabilities are also stalling consumer spending and investments.
Fakhro added his vote of confidence for the region, noting that GCC nations will have sufficient cash to pay for planned infrastructure if oil prices stay above $110. Bahrain’s infrastructure planning for next decade will be covered by the GCC Marshal Program, between $500 to 750 million. Depending on the region’s stability, these leaders expect positive growth for 2013.
Growth Estimates for Abu Dhabi Set at 5.7 Percent for Next Three Years
Growth is expected to increase, with an annual expansion rate of 5.7 percent between 2013 and 2016, according to Undersecretary of the DED, Mohammad Omar Abdullah. Abdullah also noted that Abu Dhabi’s GDP is expected to grow 3.9 percent this year.
Non-oil GDP is expect to grow 6.5 percent on average over that same time span, which indicates that the government’s plans to diversify are making progress, driven by infrastructure projects and expanding investments in the private sector.
Manufacturing in Abu Dhabi is forecasted to see 7.1 percent average growth from 2013 to 2016, according to Abdullah.
He noted that the FDI inflows to the UAE went up by nearly 40 percent in 2011, which helped the UAE nab third place in FDI recipients across the west Asian region last year. Projections for FDI remain higher for 2012 to 2014, according to Abdullah.
The resilient economic performance of Abu Dhabi was displayed last year and confirmed by recent data showing around 30 percent nominal GDP growth last year, significantly higher than the growth rate of 15.8 percent seen the previous year. At current price levels, the non-oil GDP rose by 7 percent in 2011, up from 5.4 percent the previous year, according to Abdullah.
He also noted that steady levels of improvement do not indicate an overheating economy and that government kept prices in check, with only 1.9 percent inflation in average prices thanks to the implementation of government policies.
Industrial development is vital to the emirate’s Industrial Strategy 2011 to 2015, formulated after massive efforts by the DED and aimed at driving aspirations in this type of development.
Recent changes have seen the Executive Council approve the establishment of the IDB, or Industrial Development Bureau, intended to serve as a platform of reference for Abu Dhabi’s industrial development.Paul Holdsworth, Staff Writer, Gulf Jobs Market News