Oman Joins the Economy Diversification Game

Thanks to Oman’s nationals’ welfare-focused growth trajectory over the past few decades, Omanis today savor a very high per capita income. In the process, Oman’s economy became heavily dependent on oil production. There comes the rub; the petroleum sector accounts for around 87 percent of budget revenues, 51 percent of GDP, and 60 percent of total exports. But it’s no secret that the oil reserves have been shrinking in recent years, forcing the government into economic diversification based on the development of tourism and

industries. The silver lining is that Oman is not alone in this almost all countries in the Arabian Peninsula are on their diversification path.

Nevertheless, the country is well on its track to completely recovering from the impacts of the COVID-19 pandemic and the collapse in oil prices last year. After the 2.8 percent contraction in 2020, according to Statista, the real total GDP of Oman is expected to grow by 4.14 percent by 2026, while the gross national income could amount to $75.34 billion and the investment in the country is forecasted to amount to $18.75 billion by 2025.

Going forward, government spending is also expected to increase with a plan to boost the economy in a diversified manner. It’s commendable the way the sultanate has adopted various fiscal measures over the past year to support the economy during the pandemic. This ranges from interest-free emergency loans to tax and fee reductions and waivers, the flexibility to pay taxes in installments, and a Job Security Fund to support citizens who lost their jobs.