Depressed growth outlook
The collapse in global oil prices has significantly impaired Oman’s economy in 2016, with GDP growth losing -1.7pp to +2.5% (Figures 1 and 2). Sluggish nonhydrocarbon activity is forecast to further pull down growth to a six-year low of +1.5% in 2017. Mounting fiscal strains will indeed bear a considerable weight on households’ purchasing power and corporate earnings, as private consumption is usually a key growth driver. Moreover, the extension of the OPEC deal to limit oil production until March 2018, announced in May 2017, will impede oil-related growth.