Weathering The Storm

OER presents our 18th annual review of Oman’s top 20 leading listed companies for the year 2016

The January 2017 issue of the World Bank report ‘Global Economic Prospects: Weak Investment in Uncertain Times’ states that stagnant global trade, subdued investment, and heightened policy uncertainty marked another difficult year for the world economy in 2016. Global growth is estimated to have fallen to 2.3 per cent in 2016 – the weakest performance since the global financial crisis. A moderate recovery is expected for 2017; growth is expected to rise to 2.7 per cent with receding obstacles to activity in commodity exporters and solid domestic demand in commodity importers. Growth in the Middle East and North Africa region is estimated to have slowed to 2.7 per cent in 2016, reflecting fiscal consolidation in some countries and oil production constraints in others. Growth slowed sharply in the Gulf Cooperation Council countries to 1.6 per cent as oil sector weakness spread to non-oil sectors. Growth in the region is forecast to recover to a 3.1 per cent pace in 2017, with oil importers registering the strongest gains.

The year 2016 saw the continuing decline of oil prices which eroded the Omani revenue, as the economy depends on oil income to the extent of about 34 per cent of its total revenue. Due to this this substantial reduction in the oil price, the GDP at current prices registered a decline of 14 per cent to RO27bn compared to last year.

The year 2016 closed with an average oil price of $40 per barrel compared with an average price of $62 in 2015 and the budgeted price of $45 for 2016.

Oil production in 2016 increased again marginally to about onemn barrels per day. The government’s continued emphasis on diversifying the economy away from dependence on oil continued to gain further momentum during 2016. Non-oil revenue grew by more than five percent.