Oman's national economy rebounds from COVID-19 lows

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Muscat – Oman’s economy has rebounded remarkably after its GDP nosedived 3.4% – or RO1bn – during the COVID-19 pandemic, H E Dr Saeed bin Mohammed al Saqri, Minister of Economy, stated on Wednesday.

Speaking at a session hosted by Majlis A’Shura, H E Saqri provided insights into the ministry’s strategic approach, focusing on economic diversification, overall economic performance and navigating regional and international economic challenges.

The minister outlined the hurdles encountered while formulating the 10th Five-Year Plan (2021-2025), especially the adverse impacts of the pandemic in 2020. In response, the government initiated a series of measures to mitigate these challenges, including economic stimulus packages, tax exemptions, interest-bearing financing and direct financial aid to affected institutions. Efforts were also made to bolster vital sectors such as health and education, alongside promoting e-commerce and enhancing the country’s digital infrastructure.

H E Saqri emphasised the successful transition of the Omani economy from recovery to growth, attributing this to strategic policies and an uptick in oil prices. He reported significant growth rates during the first two years of the current Five-Year Plan, with real growth reaching 2.6% and 9.6%, respectively, and projected continued positive growth for the plan’s duration.

“The government’s strategies have also effectively shielded the economy from inflationary pressures, keeping it well below the global average of 6% in 2023. Measures like fuel price stabilisation and expansion of VAT-exempt goods played a crucial role in this achievement.”

Addressing labour market dynamics, H E Saqri highlighted the successful integration of Omanis into the private sector, surpassing annual employment targets set under the current Five-Year Plan. In 2021, a total of 21,062 citizens were employed, while in 2022, 28,029 got jobs, reflecting the government’s commitment to job creation and economic diversification.

Investments in the development budget witnessed an uptick, with substantial allocations in 2021 and 2022, underscoring the government’s dedication to fostering sustainable development, the minister informed.

Looking forward, the Ministry of Economy is keenly monitoring global economic trends to formulate the next Five-Year Plan (2026-2030), focusing on competitive and sustainable growth by leveraging geopolitical shifts, energy trends, environmental sustainability and technological innovation.

H E Saqri also reassured the stability of the Omani rial’s purchasing power, despite a 23% price increase in some goods. “The nation saw a 6% rise in local liquidity, alongside growth in borrowing and deposit rates, with inflation, including rent, maintained at a modest 1%.”