Oman’s GDP Drops by 2.8% Due to Decrease in Oil Sector Output
In a recent report, Oman’s nominal gross domestic product experienced a 2.8% annual decrease, primarily attributed to a decline in output from the hydrocarbon sector. Data from the National Center for Statistics and Information, as reported by the country’s central bank, revealed an 11.9% decrease in oil sector volume produced in the final quarter of 2023 compared to the same period in the previous year.
Oil Production Continues to Decline in 2024
The trend of decreasing oil production extended into 2024, with the average daily production rate standing at 1 million barrels in February, representing a 5.9% drop from the previous year. The average price of Omani oil at the end of February was $80.2 per barrel, reflecting a 2% decline from early 2023 levels.
OPEC+ Agreement Impacts Oman’s Oil Production
Oman, along with other OPEC+ member nations, agreed to extend voluntary oil production cuts through the second quarter of 2024. This decision was part of the bloc’s strategy to stabilize the oil market and prices by reducing the overall supply. Oman extended its voluntary cut of 42,000 barrels per day until the end of June.
S&P Global Ratings Forecast Low Economic Growth for Oman
S&P Global Ratings predicted low economic growth of about 1.4% for Oman in 2024, attributing it to the flat output in the hydrocarbon sector. However, the agency revised Oman’s outlook from stable to positive, anticipating growth in hydrocarbon production to stimulate economic growth in the following years.
Positive Outlook for Non-Hydrocarbon Sector
Despite the challenges in the hydrocarbon sector, Oman’s non-hydrocarbon economy is expected to expand by around 2% in 2024, according to S&P. The agency also highlighted that credit conditions in Oman remain favorable, supporting the growth of the non-hydrocarbon sector.
Credit Extension and Private Sector Growth
The central bank’s statement revealed that total outstanding credit extended by other depository corporations in Oman grew by 2.7% to reach 30.6 billion Omani rials ($79.49 billion) by the end of February 2024. Additionally, credit to the private sector increased by 3.9% year-on-year, reaching 25.8 billion Omani rials.