ECONOMIC BACKDROP
GDP improvement tempered
GDP growth in Oman for 2017 is estimated to have been a marginal 0.2%; down from the previous estimate of 0.4%. While a recovery in 2018 still appears likely, the expectation is that 2018 will see the economy expand by 3.6%, rather than the 5.2% forecast late last year. The slower than predicted rise in non-oil activity is the key reason for the downgrading in growth (Oxford Economics).
Government income and foreign exports rise
While there is likely to be a slower than anticipated return to growth this year, government figures show that its revenues grew by 20% to OMR 6 billion between Q1 and Q3 2017 in comparison to revenues of OMR 5 billion during the same period in 2016, driven primarily by a 35% increase in net oil revenues.
In the same period, total merchandise exports grew by 22% from OMR 7.5 billion in 2016 to OMR 9.1 billion in 2017. The most significant contributor was an increase of almost 30% in oil & gas exports, underpinned by the ramping up in production at the Khazzan gas facility. Encouragingly, non-oil exports grew by over 30% from
OMR 1.8 billion in 2016 to OMR 2.4 billion in 2017.
Buoyed by higher oil prices, the economy is showing a good recovery from the lows of 2016 and this should have positive impacts across the real estate sector if this growth is sustained in the longer term.