World Bank: Oman’s economic outlook remains favourable
Oman’s economic outlook remains favourable with real growth expected to reach 1.5% in 2024, according to the latest forecast from the World Bank.
The Bank’s Spring 2024 Gulf Economic Update says increased gas production and economic diversification efforts are the key drivers of growth in the Sultanate.
The report says, “These include efforts to further improve the business environment, support the role of Small and Medium Enterprises (SMEs) in the economy and accelerate investments in renewable energy and green hydrogen.”
The World Bank expects Oman’s economy to grow further over the medium term supported by global demand recovery, increased investment in non-hydrocarbons and renewable energy.
Inflation in the Sultanate is forecast to converge to 2% over the medium term.
In the Gulf Cooperation Council (GCC) region as a whole, economic growth is expected to reach 2.8% in 2024 and 4.7% 2025, according to the report.
The positive regional prospects are partly due to the expected recovery in oil output as OPEC+ gradually relaxes production quotas during the second half of this year. They also build on the momentum of the non-oil economy which is expected to expand at a robust pace over the medium term.
“The commitment of the GCC to diversifying their economies highlights their strategic approach to fostering resilience and sustainable development during a volatile global economic period,” the World Bank said.
Despite those diversification efforts, hydrocarbon receipts will remain crucial in shaping the region’s fiscal prospects in the medium term. The report says the GCC’s fiscal surplus will continue to narrow in 2024 reaching 0.1% of Gross Domestic Product (GDP).
The report highlighted the importance of quality education in fostering long-term economic growth in GCC countries.
The World Bank’s GCC Country Director, Safaa el-Tayeb el-Kogali, said, “Good quality education prepares young people to access better employment opportunities and higher wages, increasing the potential to spur economic growth.
“Over the last decade, GCC countries have significantly improved learning outcomes. Yet, there is still scope for them to further improve in learning outcomes as they lag behind international benchmarks.”
She said the quality of education was a major factor holding back human capital development in the region as well as the ability of GCC countries to compete at the global level with top-performing countries.
The report recommends that GCC countries invest in strategies to improve learning and education quality including building foundational skills starting from early childhood, improving teaching practices and using learning assessments to inform education policy decisions.