Oman economy projected to grow 5%
By staff - Thu Jun 30, 8:02 pm
Oman plans to heavily invest in infrastructure projects in the coming years.
“We are looking at five percent (growth) as long as oil prices stay at current levels,” Darwish Al-Balushi said on the sidelines of a financial conference in Jeddah.
Analysts polled by Reuters in June expected the sultanate’s economy to expand by 4.1 percent in 2011, unchanged from March forecasts.
Oil prices have been hovering between $84 and $115 per barrel since the beginning of the year.
A Reuters poll in May showed analysts expected US benchmark crude to trade around $100 per barrel this year.
When asked if the government planned any sovereign bond issue this year, Al-Balushi said: “No, not at present. When we prepare next year’s budget … we might be able to talk about any sovereign financing.”
Oman, which issued only small development bonds in the past, has the lowest government debt among GCC oil exporters at a mere 5.1 percent of its annual economic output in 2010.
In December, Oman projected a record expenditure of 8.1 billion rials ($21.1 billion) in its 2011 deficit budget, up 13.2 percent from the previous year’s plan.
However, protests prompted Sultan Qaboos bin Said to promise a $2.6 billion spending package in April.
He also announced plans to create 50,000 new jobs among other measures.
A finance ministry official said in June that Oman expected 2011 spending to be about 20 percent higher than previously planned due to extra spending on social programs, but planned to reach a balanced budget.
When asked about next year’s budget, Al-Balushi said: “This year’s budget is expansionary. The next year will depend on how we forecast the oil price.”
Oman’s GCC neighbors unveiled a $20 billion aid package in March for the sultanate and Bahrain to help ease social tensions.
The aid package is unlikely to start this year and the sultanate’s government budget spending will rise to 9 billion rials ($23.4 billion) following social measures, the minister added.
“According to the (aid) plan announced it will be $1 billion per annum. But this is at the moment not part of the 2011 budget because it is still in the process,” Al-Balushi said.
Asked whether the aid disbursements were going to begin next year, he said: “Hopefully.”
The government originally set its 2011 budget with expenditures of 8.1 billion rials and a deficit of 850 million based on an estimated oil price of $58 per barrel.