MUSCAT, APRIL 30
The value of Omani imports and exports soared 33 per cent to reach a value of RO 44.9 billion at the end of 2022, up from RO 33.8 billion a year earlier, underscoring the healthy growth of the economy in the post-pandemic phase.
According to the Directorate General of Customs (Royal Oman Police), the strong uptick in two-way trade will have a positive impact on the Omani economy and create new job opportunities as well. Contributing to this growth is an increase in demand for Omani products in international markets, particularly oil and gas, petroleum and petroleum products, metals, chemicals, and textiles.
At the same time, Oman continues to rely on imports of food, machinery, transport equipment, and chemicals. The growth in the trade volume indicates that the country's economy is growing, and the demand for these products is increasing, the Customs Department noted.
Moreover, the surge in trade volume could strengthen Oman's economic ties with other countries, expand its trade networks, and provide access to international trade agreements, it said.
Meanwhile, the Institute of International Finance (IIF), the voice of the global financial industry, has predicted that GCC countries will remain resilient despite headwinds. According to the Washington DC-based institute, the positive outlook will remain undiminished by forecasts of average oil prices expected to fall from $100 per barrel in 2022 to $85 in 2023 and $80 in 2024.
“We revised our growth forecast for 2023 for the GCC region, from 2.7 percent to 2.2 percent, due to the expected decline in oil production in Saudi Arabia, the United Arab Emirates, Kuwait, and Oman,” the report said. However, non-oil growth is expected to remain robust (between 4-5 per cent), driven by consumption and private investment.
Inflationary pressures will remain low at 2.6 percent, supported by pegged exchange rates, ceiling prices for food and fuel products, labor market flexibility (where foreign labor accounts for more than 60 percent of the workforce), and lower rental prices amid increased supply.
The IIF estimates that the combined current account surplus will decrease from a peak of $373 billion in 2022 to $194 billion in 2023, due to lower oil export volumes and lower prices.
The combined fiscal surplus is expected to shrink from 6 percent of GDP in 2022 to 2.5 percent of GDP in 2023. “The expected improvement in non-hydrocarbon revenues, and continued rationalization of non-priority spending, may offset the decline in the volume of oil exports, resulting in lower fiscal balanced oil prices.”
The Institute believes that the current account and large fiscal surpluses will lead to more resident capital outflows, albeit much lower than in 2022. As a result, the total general foreign assets of the GCC countries will peak at around $3.3 trillion by the end of 2023.
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