Oman to focus on diversifying economy

21 Dec 2014

(MENAFN) Oman’s government said that the country is currently focused on finding alternatives for oil and gas revenues by investing heavily in agricultural, industrial, fisheries, tourism and other sectors in the country, as the slide in oil price is putting the sultanate’s economy under pressure, Times of Oman reported.

The country’s growth is currently dependent on oil revenues, with oil revenues constituting 83 percent of the revenues or USD21.10 billion compared to 17 cent for non-oil revenues or USD9.06 billion, with almost 50 percent of the non-oil revenues being generated from estimated taxes.

Meanwhile, the sultanate said that the budget for this year which estimated the state revenue at USD30.29 billion and the economic growth to hit 4.5 percent this year, was built on oil prices of USD85 per barrel, but with the current prices, the sultanate is expected to register a deficit of USD4.66 billion or 15 percent of the revenues and 6 percent of the GDP.

These numbers, added to the warnings made by the International Monetary Fund (IMF) and the World Bank that diversifying sources of income will reduce Oman’s reliance on oil revenues is the strategic solution, led the Omani government to place the goal of diversifying the sources of national economy and the use of the available human, natural and non-oil resources as part of its five-year development plans for the Sultanate.

As part of this plan, the government said that it is currently seeking to find solutions to enhance public expenditure through diversifying sources of income and utilizing oil revenues in supporting non-oil sectors, such as tourism, agriculture, fisheries and manufacturing industries.