GDP of Oman increased by 14.4% in 2004.
Global Investment House – Oman Economic & Strategic Outlook-II – Gross Domestic Product- The Omani economy exhibited tremendous resilience and maintained its upward momentum in 2004 by registering an increase of 14.4% in its nominal GDP to reach RO9.5bn for the year 2004. This positive growth in GDP can be attributed to a number of factors, the most important of which was the improvement in average oil prices which increased to over US$34.42 during 2004. On the back of high oil prices, crude petroleum sector further expanded and contributed 39.7% to the nominal GDP in 2004. Oil and Natural gas sectors combinedly constituted 76.7% of industrial activity in the country and contributed 42.3% to the GDP in 2004.
Table 1 : Gross Domestic Product
|
|
2000 |
2001 |
2002 |
2003 |
2004 |
|
GDP at Current Market Prices (RO mn) |
7,639.2 |
7,670.4 |
7,807.0 |
8,342.8 |
9,544.8 |
|
% change yoy |
|
0.4% |
1.8% |
6.8% |
14.4% |
|
GDP at Constant Market Prices (RO mn) |
5,649.5 |
6,073.6 |
6,176.7 |
6,329.5 |
N/A |
|
% change yoy |
|
7.5% |
1.7% |
2.4% |
|
|
GDP per capita (RO) |
3,181.4 |
3,096.0 |
3,076.0 |
3,578.9 |
3,960.1 |
Source: Ministry of National Economy
*Data for 2003 Provisional, 2004 Preliminary
The non-petroleum industrial activity, driven by strong growth in manufacturing and construction sectors, rose by 15.5% in 2004. However, as a percentage of overall GDP composition, its share remained at 12.8% in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />2004, a marginal increase from 12.1% observed in the previous year. Manufacturing activities related to refined petroleum products and LNG grew by over 12.5% in 2004 driven mainly by a 30% increase in the value of production of basic chemicals.
Total non-petroleum industrial activity which includes the revenues generated from non-petroleum industrial activities, agriculture and fishing and services sectors, has been consistently increasing its share from 53.4% in 2000 to 60.8% in 2003. The share of non-petroleum activity was at 59.5% in 2004. The main drivers for such increase are the activities related to a higher contribution from the Manufacturing (including LNG) Construction and Services sector. At RO1226.2mn, the total value added by the non-petroleum industrial sector accounted for 12.8% of total GDP. Similarly, “Services activities” contribution to GDP increased from 42.9% in 2000 to 44.9% in 2004.
Table 2: Economic Activities as % of total GDP
|
|
2000 |
2001 |
2002 |
2003 |
2004 |
Source: Ministry of National Economy and Global Research
Total petroleum activities increased its share in the GDP composition from 41.2% in 2003 to 42.3% in 2004. The contribution from “Natural Gas” activities to GDP has almost doubled in the last 4 years from 1.3% in 2000 to 2.6% in 2004.
Agriculture and fishing sectors combinedly contributed 1.7% to the GDP in 2004. While agriculture sector grew by 0.2% in 2004, fishing related activities shrunk by 1.9%. The Vision-2020 plan envisages the contribution from agriculture sector to be at 3.1% and fishing sector at 2% of the total GDP by 2020. This would entail an average annual growth of 4.5% for the agricultural sector and 5.6% for the fishing sector.
The services activities witnessed a growth of 9.8% in 2004 and contributed 44.9% to the total GDP in 2004. Wholesale and retail trade constituted the highest share in services sector output at 27.4% and points to the significance of trading in goods and services in the national economic activities. Public administration and defense related activities grew by 4.8% in 2004 and constituted 20% of total services sector output in 2004. Growth in this sector depends very much on the government expenditure in these areas. Real estate and business activities grew by a marginal 0.8% in 2004 and contributed 10.5% to services sector in 2004.
Analysis of the consumption pattern reveals that the total final consumption, which includes the household and government sectors, followed the trend of nominal GDP. Gross capital formation, which include contributions from building & construction, plant & machinery and intangible fixed capital, was at RO1306.6mn in 2003 or 15.7% of the GDP. The higher capital formation in 2003 was attributable to 67% expansion in capital formation under the category of investments in “plant, machinery and vehicles” reflecting the investment needs in various oil and non-oil related projects in the country and presents positive aspects for future growth opportunities.
Table 3: Components of GDP
|
In % of GDP |
2000 |
2001 |
2002 |
2003 |
2004 |
|
Private Consumption |
39.6 |
43.2 |
43.1 |
43.8 |
N/A |
|
Government Consumption |
20.7 |
22.3 |
23.1 |
22.2 |
N/A |
|
Capital Formation |
11.9 |
12.6 |
12.8 |
15.7 |
N/A |
|
Exports-Imports |
27.8 |
21.8 |
21.0 |
18.4 |
N/A |
Source: Central Bank of Oman
