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Brighter Prospects for Oman Economy in 2012

Source: 1/3/2012, Location: Middle East

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Experts are upbeat about brighter prospects for Oman’s economic growth during 2012. Abdul Kader Askalan, CEO, Oman Arab Bank, says Oman’s business environment is headed for brighter prospects in the current year. “The expectation is that 2012 will be the productive project year, as financially the government will be able to execute all projects which have been developed. We are confident that all the business sectors will be very active in 2012”.

Askalan says some of the factors and strengths that will make Oman’s economy stronger during 2012 include oil prices at above $100, the government’s concentration on the productive and industrial projects and the steadiness of the social and political situation”. About opportunities for the SME sector, Askalan said, “SMEs will be very much encouraged in 2012, since the Ministry of Industry and Commerce has assigned top priority to the SMEs, and signed an agreement with Oman Arab Bank and BankMuscat to offer loans to SMEs, and the Government will guarantee 50 per cent of these loans”.

Sunil Sivanand, Managing Director, Acette Technologies FZ-LLC, says, “I have great hopes that 2012 will be a very good year for business in Oman. All the fundamentals are looking good. The oil price is holding steady. The Government is investing in several new areas. The housing market may see saturation, and hence rents would lower. This would mean lower cost of operation for other businesses, and hence growth. Overall, I am bullish of how things will be in Oman”. Earlier in a recent speech, Darwish bin Ismaeel al Balushi, Minister of Financial Affairs, said total expenditure for 2012 has been set at RO 10 billion, with expected revenues forecast to be RO 8.8 billion. The economy should grow by 5.5 per cent this year, with GDP projected to expand by 5 per cent in 2012, the minister said. The increase planned for 2012 will help further stimulate the economy and should push growth.

In its 2012 spending programme, the government will be increasing expenditure by around 10 per cent over last year’s total, with much of the additional outlays being directed towards projects aimed at boosting the economy and creating employment opportunities for Omanis. Above all, it is worth noting that Oman’s economy has largely been unaffected by the recent turmoil in global financial markets and the Eurozone debt crisis because its exports are mainly to faster-growing Asian countries, according International Monetary Fund (IMF).

“With about 80 per cent of Oman’s oil-dominated exports going to Asia, the impact of the European crisis will be limited as long as it does not translate into significantly lower oil prices,” the agency said, adding “Omani banks have little exposure to the euro zone. Credit to the private sector has continued to pick up and is projected to grow by over 11 per cent in 2011.” The IMF said given a projected 10 per cent increase in government expenditure and with some, overall real GDP growth is projected to edge down to 5 per cent in 2012.

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