Improvement in global economic indicators last week should buoy GCC policymakers, industries, particularly the energy sector. A few reasons support this outlook. Global trade and business optimism improved this week with world and Asian share markets rising on Monday.
The benchmark MSCI World Index for global stocks turned positive in May while the US dollar remained steady at a five-week low on speculation of probable easing of US monetary tightening.
The MSCI index hit its highest level in more than four weeks. It gained 0.55 per cent to 656.4 points, supported by a positive session in Europe after strong gains in Asia. The index was now up 0.5 per cent so far this month.
Many countries have eased travel controls gives further boost to business and trade transactions. Last week Shanghai lifted controls on businesses easing a city-wide lockdown clamped two months ago. Governments have taken this decision to correct the revised global economy rate of 3.5 per cent from 3.9 per cent last month.
Despite stock markets rally, the optimistic outlook, and easing of controls supply chain disruptions persist because of Russia-Ukraine War. Further, the impact of climate change has altered regional weather patterns which have affected agricultural produce in several countries.
Climate changes have reduced crop yields. Rising production costs stress farmers further. These variables have affected the quality and quantity of agricultural produce in central and southern Europe.
Significant parts of southern Europe have witnessed harsh heatwaves, forest fires and droughts. Rains and winter floods have disrupted routine life in northern Europe over the last decade. The Mediterranean region is now drier and vulnerable to drought and wildfires.
Two years ago, a European Environment Agency report had warned “decrease in crop and livestock production”. The report said, “It may even have to abandon (production) in parts of Europe’s southern Mediterranean regions due to the increased negative impacts of climate change”.
Extreme weather fluctuations persist in the Gulf region too. The Oman Meteorology Office, in its weather bulletin, last week said the Sultanate of Oman recorded unusually high temperatures across the country with the Wilayat of Al Suwaiq recording the highest at 47.4 degrees Celsius last week.
The looming climate change crises notwithstanding, prospects of improved trade and business, particularly for Oman look brighter for the near term. Official data support this view.
Oman’s National Centre for Statistics and Information (NCSI) report says inbound and outbound domestic flights through the airports of Muscat, Salalah, Suhar, and Duqm increased 30.4 per cent in 2022, or 1,973 flights compared to 1,512 in 2021.
International and domestic flights operating at various airports of the Sultanate of Oman (Muscat, Salalah, and Suhar) at the end of February 2022 increased 80.2 per cent to 6,708 flights at the end of February 2022, compared to 3,723 flights at the same period in 2021.
Salalah Airport recorded a significant increase in the number of flights by 50.1per cent. The number of international flights arriving and departing through the airport reached 458 flights at the end of February 2022, an increase of 137.3 per cent.
Traveller movements show a spurt in business. Increase in population, too, propels a country’s economy. Population growth too increases transactions in healthcare, transport, sales of goods and services.
Oman’s population reached 4,527,446 at the end of December 2021 compared to 4,481,042 during the same period in 2020, an increase of 1.04 per cent. The data show an increase in citizens by 2.49 per cent compared to the same period in 2020. The number of Omanis stood at 2,804,117 representing 62 per cent of the total population against 1,723,329 expatriates representing 38 per cent, a decrease of 1.25 per cent.
The above data points to a better near term forecast for the Sultanate of Oman and the region, barring unexpected disastrous events.
[Sudeep Sonawane, an India-based journalist, has worked in five countries in the Middle East and Asia. Email: [sudeep.sonawane@gmail.com]
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