Imperatives of balancing economic growth and diversification in Oman
Published: 04:11 PM,Nov 30,2024 | EDITED : 08:11 PM,Nov 30,2024
The data released in the Monthly Statistical Bulletin of the National Centre for Statistics and Information (NCSI) for November 2024 highlights significant developments in Oman’s economic performance. The figures reveal a decline in non-oil exports and a notable rise in imports, accompanied by fluctuations in the Import Price Index. These indicators underscore the challenges facing Oman’s journey toward economic diversification, prompting a closer examination of their implications.
Non-oil exports registered a 14.1 per cent decline compared to the same period last year, amounting to RO 4.534 billion, down from RO 5.276 billion in 2023. While exports to the UAE increased by 14.1 per cent and to South Korea by an astounding 1200.3 per cent, exports to Saudi Arabia, India, and the United States dipped during this period.
Conversely, imports rose by 10.9 per cent, reaching RO 12.178 billion compared to RO 10.98 billion last year. The UAE, China, and Kuwait remain Oman’s top import partners. However, this heavy reliance on a limited number of trading partners poses risks to economic stability in the event of global market fluctuations.
The overall Import Price Index fell by 1.5 per cent compared to Q2 2023 and by 3.3 per cent compared to Q1 2024. While this decline might ease pressure on local consumers, the rise in prices of essential goods such as food and beverages—up by 6.3 per cent and 33.1 percent, respectively—points to persistent inflationary pressures.
At the same time, the decline in mineral fuel prices by 17.4 percent could benefit production sectors but may also impact export revenues from energy-related products.
These figures highlight the urgent need to accelerate Oman’s economic diversification agenda, as outlined in Vision 2040. The decline in non-oil exports and the growing reliance on imports emphasize a gap that must be addressed through policies that support local industries and enhance productivity and innovation.
The private sector must play a pivotal role in this transformation by investing in industrial, agricultural, and service sectors, thereby reducing dependence on imports and generating greater value-added benefits.
To achieve its ambitious goals, Oman must focus on enhancing its trade infrastructure and strengthening its logistics services. Additionally, exploring new markets for Omani products and boosting their competitiveness in international markets have become pressing priorities.
Simultaneously, stabilizing local prices is vital to shield consumers from unwarranted increases in the cost of essential goods.
Oman can overcome these challenges by fostering collaboration between the public and private sectors, capitalizing on available opportunities to reinforce economic sustainability and build a more prosperous future.
Qasim Al Maashani
The author is the head of Oman Observer's Business section
Non-oil exports registered a 14.1 per cent decline compared to the same period last year, amounting to RO 4.534 billion, down from RO 5.276 billion in 2023. While exports to the UAE increased by 14.1 per cent and to South Korea by an astounding 1200.3 per cent, exports to Saudi Arabia, India, and the United States dipped during this period.
Conversely, imports rose by 10.9 per cent, reaching RO 12.178 billion compared to RO 10.98 billion last year. The UAE, China, and Kuwait remain Oman’s top import partners. However, this heavy reliance on a limited number of trading partners poses risks to economic stability in the event of global market fluctuations.
The overall Import Price Index fell by 1.5 per cent compared to Q2 2023 and by 3.3 per cent compared to Q1 2024. While this decline might ease pressure on local consumers, the rise in prices of essential goods such as food and beverages—up by 6.3 per cent and 33.1 percent, respectively—points to persistent inflationary pressures.
At the same time, the decline in mineral fuel prices by 17.4 percent could benefit production sectors but may also impact export revenues from energy-related products.
These figures highlight the urgent need to accelerate Oman’s economic diversification agenda, as outlined in Vision 2040. The decline in non-oil exports and the growing reliance on imports emphasize a gap that must be addressed through policies that support local industries and enhance productivity and innovation.
The private sector must play a pivotal role in this transformation by investing in industrial, agricultural, and service sectors, thereby reducing dependence on imports and generating greater value-added benefits.
To achieve its ambitious goals, Oman must focus on enhancing its trade infrastructure and strengthening its logistics services. Additionally, exploring new markets for Omani products and boosting their competitiveness in international markets have become pressing priorities.
Simultaneously, stabilizing local prices is vital to shield consumers from unwarranted increases in the cost of essential goods.
Oman can overcome these challenges by fostering collaboration between the public and private sectors, capitalizing on available opportunities to reinforce economic sustainability and build a more prosperous future.
Qasim Al Maashani
The author is the head of Oman Observer's Business section