Oman Economic Outlook
GDP expanded 4.5% in January–September year on year, largely due to the hydrocarbons sector; crude output was up 13.4%. Non-oil activity was dented by contractions in agricultural and industrial production. The services sector performed more strongly, boosted by a significant expansion in the transportation and storage sector. In Q4, economic growth is projected to have remained roughly stable. Heading into the new year, oil production was up 3.6% in January, in part due to a tougher base effect. In other news, on 14 February, Sultan Haitham bin Tariq unveiled new welfare measures totaling around USD 1.1 billion. Their implementation—the timing of which remains uncertain—will likely boost social stability ahead at the cost of hurting the fiscal surplus.
Inflation was stable at 1.9% in January. Inflation should decline this year, averaging at the lowest rate in the Gulf region. Key drivers of this decline include recent rate hikes, government subsidies and lower commodity prices. Factors to watch include gyrations in commodity prices and potential further government intervention.