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Abu Dhabi: Oman's nominal GDP is projected to grow 16 per cent this year due to high energy prices and the diversification push, a new report from the National Bank of Abu Dhabi said yesterday.
But the impact of trade agreements has yet to translate into significantly greater non-hydrocarbon trade, it added.
"Oman's national income is projected to reach $35.3 billion in 2006 exhibiting strong growth in line with other GCC member states due to higher energy prices," the report obtained by Gulf News said.
"The share of gas revenues has risen to 8.9 per cent in the first half of 2006, up from 5.7 per cent of total revenues in first half 2005. The diversification push continues to focus on gas, chemicals, aluminium and tourism sectors."
The Sultanate's GDP stood at $30.7 billion in 2005.
Oman concluded a free trade agreement with the US two months ago and, in the process, allowed the formation of trade unions in order to finalise the treaty.
"Oman, like other GCC states had been reluctant to allow unions given that the country has a predominantly foreign labour force composition. The country is also to open its doors to US firms in telecommunications, an element that was required under WTO agreements, anyhow and banking sectors," the report said.
With hydrocarbon activity comprising 49 per cent of GDP in 2005, Oman is extremely dependent on oil and gas sectors. The share of the hydrocarbon sector rose in 2006 first quarter to 50.6 per cent of GDP reflecting the rise in oil prices during the period.
Services represented 36.4 per cent of economic activity and non-hydrocarbons industry 13.2 per cent with agriculture and fishing accounting for a mere 1.2 per cent of output.
Oman's current account balance is projected to touch $6.3 billion (18 per cent of GDP) this year compared to $4.7 billion last year. It is expected to however be lower at $5.8 billion in 2007.
Foreign reserves
Oman Central Bank's foreign exchange reserves stood at $4.8 billion in June, up 10 per cent from last year, the report said.
Banking sector assets are estimated at some $16 billion as of June 2006, up from $14.6 billion end of last year.
Private sector credit grew faster than domestic credit, but not fast enough. Its share in the GDP also fell.
"Banking sector assets have grown at a much slower pace than the growth of the UAE banking sector, the report said, adding that personal loans dominate banking sector loans.
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