CBO: Oman’s Nominal GDP Contracts as Petroleum Contributions Dip

The Sultanate of Oman’s nominal Gross Domestic Product (GDP) declined 4% in 2019, the Central Bank of Oman (CBO) revealed, citing preliminary national accounts data. This compares with a nominal GDP growth of 12.3% in 2018

The nominal contraction in 2019 was driven by shrinkages in the contributions of the petroleum and non-petroleum sectors, which had contracted by 8.4% and 0.9% respectively, the apex bank said. “The contraction in the petroleum sector was contributed by both crude oil and natural gas, which declined by 9.6% and 1.5% respectively. The decline in non-petroleum industrial activities and services activities by 0.6% and 1.4% respectively, led to a contraction in the non-petroleum sector,” the Central Bank noted in a review of banking and monetary developments during March 2020. Agriculture and fishing activities, on the other hand, registered “impressive” nominal growth of 7.4% in 2019, according to the CBO report.

Significantly, the price of Omani crude averaged US$64.4 per barrel during the first quarter of 2020, which was higher by 5.6% over the corresponding average of Q1 2019. The average has since plummeted in the wake an unprecedented slump in global demand amid a glut in supply.

Global efforts to cut output by the OPEC+ alliance of oil producers, which includes the Sultanate of Oman, have since helped shore up international prices. DME Oman, the Sultanate’s crude benchmark, gained US$0.43 per barrel to settle at US$31.16 per barrel in trading on the Dubai Mercantile Exchange on Monday for July 2020 delivery. Prices have rallied since April 1, when the global production cuts agreed by the OPEC+ alliance came into effect.

Oman’s daily crude production averaged 998,300 barrels during the first quarter of 2020, up 2.9% from the corresponding average of Q1 2019.