Economy has entered growth phase

MUSCAT: The performance indicators show that the Omani economy has moved beyond the pandemic recovery phase, and has entered the growth phase. The economy has achieved remarkable growth rates, which were strengthened by policies and measures taken by the government. As a result of the improvement in oil prices, the economy has witnessed rapid positive developments during the past period of the Tenth Five-Year Development Plan (2021-2023).

This was revealed by Dr Said bin Mohammed al Saqri, Minister of Economy when the Majlis Ash'shura hosted him on Wednesday during its fifth regular session of the first annual convening of the 10th term (2023-2027).

During a discussion with the members, the minister in his statement outlined key areas of focus related to the nation's economic performance at the midpoint of the current five-year development plan.

He said that, over the past period (2021-2023) of the current five-year plan, the economy saw rapid developments evidenced by a rise in oil prices over the first two years (2.6 percent and 9.6 percent, respectively), while the outlook for the rest of the Tenth Five-Year Plan remained positive.

The minister pointed out that the proactive government measures contributed to protecting the economy from inflation and keeping it within safe limits, despite the significant rise in global inflation rates that averaged about 6 percent in 2023. The inflation rate in Oman did not exceed 1 percent, he added.

This came as a result of the policies taken to limit the rise in prices, stemming from the Royal directives of His Majesty Sultan Haitham bin Tarik - to fix the price of fuel at the level of October 2021 as a maximum, and to expand the number of goods exempted from value-added tax, he noted.

The minister said that the plan focused on increasing the number of Omanis working in the private sector, both through training and education of youth and by devising flexible employment terms.

The total number of Omanis who secured jobs during 2021 grew to 21,062, and in the second year of the plan, the number also grew to 28,029 workers, exceeding the annual target estimated in the plan.

To determine the priorities of development projects in the Tenth Five-Year Plan, the ministry has created a matrix for evaluating and selecting priority projects submitted by all ministries, governorates, and government agencies for projects that require implementation in the budget of the fiscal year. The matrix aims to set specific criteria for evaluating and selecting development projects according to a clear and transparent methodology through which priority projects are selected according to unified standards, in order to ensure social and economic impact.

The first and second years of the plan witnessed an increase in spending on the development budget, as the actual spending in the 2021 budget amounted to about RO 1,192 million, and in the 2022 budget, the actual spending stood at about RO 1,306 million. It is expected that the actual spending on the development budget will be about RO 1,200 million.

Commenting on the performance of key economic sectors during the tenth plan, Dr Al Saqri noted that the fisheries sector's contribution to the GDP stood at 0.9 percent by the end of September 2023 (versus a 10th plan target of 2 percent). For the agricultural sector, it stood at 1.4 percent in September 2023 (versus the 10th plan target of 1.5 percent). The contribution of mining is 0.7 percent, which equals that of the 10th plan target.

According to the statement made by the minister, the economy has further witnessed positive developments within the timeframe set by the government. Meanwhile, the first two years of the plan have seen remarkable growth of approximately 2.6 percent and 9.6 percent, respectively, with positive growth anticipated for the remaining period.

The minister also addressed the government's proactive measures to safeguard the economy from inflationary pressures. These strategies effectively maintained inflation within safe limits, despite the global average reaching around 6 percent in 2023.

In contrast, Oman's inflation rate remained below 1 percent during the same period.

Additionally, the minister underscored the critical role of the Ministry of Economy in navigating regional and international economic fluctuations. The ministry actively pursues international collaboration and explores prospects for strengthened investment and economic partnerships.

Dr Al Saqri said that the Ministry of Economy is working side by side with various government departments to improve the performance of the Sultanate of Oman in international indices, by emphasizing two approaches; namely raising the performance of the Sultanate of Oman in international indicators quoted in the Oman Vision 2040 document, and monitoring improvement in sustainable development goals 2030.