Oman’s Real GDP Grows in Q3

Oman’s real GDP – gross domestic product at constant prices – grew at an annual rate of 2.2% in the third quarter of 2023, according to data released by the National Centre for Statistics and Information (NCSI).

The sultanate’s real GDP reached RO9.388 billion (US$24.41 billion) for the July-September quarter, compared to RO9.186 billion (US$23.88 billion) recorded in the same period last year, as shown by the preliminary official data. Real GDP saw a slight contraction of 0.2% in the second quarter of 2023.

Non-hydrocarbon GDP grew at a rate of 3.9% in the third quarter, compared to a 0.9% contraction in hydrocarbon GDP. The growth of non-hydrocarbon GDP was primarily driven by robust activities in Oman’s services sectors. Within the hydrocarbon sector, oil activity recorded a decline of 2.7% to RO2.805 billion (US$7.29 billion) in Q3 2023, while natural gas activity grew by 10.3% to RO506 million (US$1,315.58 million) over the same period. Oman’s oil production has slightly decreased this year on account of OPEC+ output cuts agreement.

In non-hydrocarbon growth, overall industrial sector activities decreased by 2.6%, primarily due to declines in manufacturing (-7.8%) and construction (-10.7%) sectors. Activities in the services sector, the largest contributor to Oman’s GDP, grew by 6.5% in the third quarter of 2023. Within the services sector, wholesale and retail trade grew 4.3%. However, the third quarter GDP growth numbers are significantly lower than Oman’s GDP growth in 2022 when the sultanate recorded a growth of 4.3% for the full year.

For the full year 2023, the government’s estimates in January projected Oman’s real GDP to grow by 5.5%, mainly due to an anticipated increase in oil and gas production. However, a slight decline in Oman’s oil production this year has affected the growth numbers.

International institutions such as International Monetary Fund (IMF), World Bank and global credit rating agencies have estimated that Oman’s 2023 economic growth will remain significantly lower than the previous year, mainly due to an expected decrease in oil output owing to an OPEC+ decision, of which Oman is a member.

The IMF recently said that Oman’s economic outlook remains favorable. ‘Supported by favorable oil prices and sustained reform momentum, Oman’s economic recovery continues and inflation remains contained.’

‘While growth is projected to slow down this year to 1.3% due to OPEC+-related oil production cuts, it is set to rebound starting in 2024, supported by higher hydrocarbon production and stronger non-hydrocarbon growth,’ IMF said in a statement.