x Abu Dhabi, UAESaturday 22 July 2017

Government predicts solid growth for the economy

 

State spending increase and laws to help diversification

The government of Oman expects the economy to expand by about 5 per cent this year, driven by higher oil prices and public spending.

It is based on estimates of oil at an average of US$99 per barrel - well above the government's budget oil price of $75.

The country aims to diversify the economy via new tax laws, better workforce regulations for its 2.7 million people and a more market-friendly economic environment. Oman generated revenues of about 11.44 billion Omani rials (Dh109.28bn) last year and expects that to fall to some 8.8bn rials this year.

It also expects to run a deficit of 1.2bhn rials, according to Bank Nizwa's listing prospectus.

Oman this year increased planned government spending between last year and 2015 to more than 54bn rials from 43bn rials.

Much of the increase will be spent on bigger unemployment allowances and subsidies to boost living standards. The government hopes to create between 200,000 and 275,000 jobs over the period.

* Sean Cronin