Oman is predicted to have the highest growth among the countries of the Gulf Cooperation Council next year, according to a new report from the World Bank.
The Sultanate’s growth rate is expected to spike to six per cent in 2020, thanks to returns from the Tanfeedh programme for economic diversification, as well as continued investments to expand its oil and gas sector, with the Khazzan gas fields being targeted for significant expansion.
The figures were mentioned in the World Bank’s Gulf Economic Monitor as well as its Oman: Economic Update for April 2019.
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While growth in Oman is predicted to dip to 1.2 per cent in 2019 from 2.1 per cent last year, it was forecast to jump up to six per cent in 2020.
The report also added that diversification investment would continue to support growth in 2021 and the medium term.
In comparison, Bahrain’s growth is projected to reach 2.2 per cent in 2020, while Kuwait’s economy is likely to grow at around three per cent.
Qatar’s growth is rated at 3.4 per cent, and in Saudi Arabia, growth is expected at the rate of three per cent. The UAE’s growth rate is also forecast at three per cent in 2020.
The Oman Economic Update said: “Growth is projected to slow to 1.2 per cent in 2019 as Oman’s commitment to the December 2018 OPEC+ output cut constrains oil production. There will be a one-off spike in growth to six per cent in 2020 as the government plans to significantly increase investment in the Khazzan gas field.
“The potential boost from the diversification investment spending would continue supporting growth in 2021 and the medium term,” the report adds.
The Gulf Economic Monitor of the World Bank added: “The start of production at the $5 billion Raba Harweel Project, the largest undertaking by Petroleum Development Oman, and a planned sizeable investment in the Khazzan gas field, jointly owned by British Petroleum and Oman Oil and slated to increase natural gas production by 50 per cent to 1.5 billion cubic feet per day, could spur GDP growth in Oman to 6 per cent in 2020.
“Thereafter, growth is projected to slide back to 2.8 per cent in 2021,” according to the World Bank report “Growth towards the end of the forecast period is expected to be supported by private non-oil investment, including from allowing a hundred per cent foreign ownership of businesses (subject to a threshold on capital), implementing a proposed new Foreign Capital Investment Law, liberalising key sectors of the economy, and increasing the use of Public Private Partnerships (PPP).”
