Oman's GDP grows 3.6% as oil prices rise

Oman's economy expanded by 3.6 per cent in real terms in the first half of the year bolstered by the hydrocarbon sector, a finance ministry official told Reuters yesterday Data showed this week Oman's gross domestic product jumped by 15.3 per cent in nominal terms in January-March thanks to robust oil prices. The finance ministry did not release the GDP data in constant prices. "We have had a good oil income in the first half and that has boosted growth in real terms to 3.6 per cent in this period," said the ministry official, who declined to be named. Real GDP growth was 3.1 per cent in the first half of 2010. Oman booked oil income of 4.1 billion riyals (Dh39 billion) in January-June, 43 per cent more than in the same period last year, ministry figures showed. Article continues below Central bank optimism Analysts polled by Reuters in June expected the state's economy to grow by 4.1 per cent in real terms this year, while the central bank is more optimistic, forecasting 5 per cent growth. Sultan Qaboos Bin Saeed, a US ally who has ruled Oman for 40 years, promised $2.6 billion (Dh9.55 billion) in additional spending in April and announced plans to create 50,000 new jobs after demonstrators protested about unemployment and corruption. "The disruptions in Oman were not nearly as severe as in other places in the region," said Nancy Fahim, Standard Chartered economist in Dubai. She also said the non-Opec country, which does not have to adhere to the organisation's output quota, was likely to produce more oil in the first half of the year compared to last year. The sultanate boosted its oil output by nearly 3 per cent year-on-year to 159.1 million barrels in the first three months of 2011, when crude prices rose to almost $115 per barrel fuelled by revolts in the Arab world. Oman's hydrocarbon-related GDP, which accounts for nearly half of the $58 billion economy, jumped by 17.8 per cent in nominal terms in the first quarter. "Oman is still facing a much closer deadline to oil running out than other oil-producing countries in the region and they need to funnel those boosted oil revenues into other sectors in order to diversify and move away from oil," Fahim said.