macro economic paper submission 21601971- rev1.pdf

Assessment 3 – Individual macroeconomic country case study

1 | P a g e

Table of Contents Executive Summary ....................................................................................................................................... 2

Introduction .................................................................................................................................................. 3

Background of the country ........................................................................................................................... 3

Current Economic Conditions & Problems ................................................................................................... 3

Study on Macro-Economic key indicators ................................................................................................ 4

Analysis of Major Macroeconomics Theory .............................................................................................. 5

Economic growth ...................................................................................................................................... 5

Gross Domestic Product (GDP) ................................................................................................................. 6

Inflation Rate ............................................................................................................................................. 8

Taxation: ............................................................................................................................................. 11

Recommendation of Major Macroeconomics Theory ............................................................................ 11

Policy 1: ................................................................................................................................................... 11

Policy 2 .................................................................................................................................................... 12

Policy 3 ................................................................................................................................................ 12

Conclusion ................................................................................................................................................... 13

References .................................................................................................................................................. 14

Appendix 1 .................................................................................................................................................. 15

Appendix 2 .................................................................................................................................................. 16

Appendix 3 .................................................................................................................................................. 17

Appendix 4 .................................................................................................................................................. 18

.................................................................................................................................................................... 19


2 | P a g e

Executive Summary The country I have chosen for the Macroeconomic study was Sultanate of Oman one of the oil suppliers the Middle East. I just detailed the background of the country and current economic conditions. The first part of the economic analysis focused on the macro key indicators and the second part was focusing analysis of macroeconomic theory and policy recommendation.

In a nutshell, the Oman GDP 50% rely on the oil price. Decline in oil price directly affect the country economy and growth, this is especially visible on the study below on the budget deficit for coming years, expected approximately 7% of GDP in 2015 and 5% of GDP in 2016. This put the country at risk; the inflation rate is negative for last few months. If this persist it will generally create the fall in revenue, profits, shrinking employment, and increase defaults on loans.

The government planning to diversify their expenditure to other areas such as infrastructure, logistics, transportation, manufacturing, tourism, fishery industries to reduce the contribution of oil and gas industry and bring it down from 50% to 9% of GDP in 2020.

As per the analysis, the three policy recommendations suggested are as below,

The introduction of Expansionary Fiscal Policy. Developing new industries and self-employment opportunities. Efficient handling of Omanization Policy.

Oman’s Vision 2020 long-term development plan will be aiming to ensure economic and financial stability by boosting private sector participation, diversifying the economy and investing in the Omani workforce. Incoming visitors are increasingly being considered a key source of revenue for Oman with the tourism sector’s contribution to GDP forecast to jump to 8.2% by 2024, from 6.4% in 2013. (Oxford business group 2015). The private sectors of various industries should take the responsibility socially for the development of the employment opportunities and the incentive’s to take up the job in the private sector. This will bring the confidence of citizen and the appreciation for the private sector. This will encourage the Omani youth to work in the private sector, will be positive work ethic and good productivity. Private sector participation on this activities’ will grow the economic conditions significantly.

Oman economy will continue its positive upward trend in 2016, however if the GDP growth maintained at 3.5%. To improve the real GDP at this crashed oil market, government need to invest in new sectors such as port expansions, tourism, and manufacturing will increase the revenue and GDP in spite of oil price decline.


3 | P a g e

Introduction

The important reason for choosing Oman as the country to do my research on Macroeconomics is because my first overseas job encounter was in the most bustling region in Oman, it is a one of the hubs for Oil and Gas projects and constructions industry in Middle-East. I was working as Project Engineer for a construction Group of companies in major projects. I had an interest in reading about the economics of the country during that period, I admired about the growth and it has happened only in the time of present Ruler Sultan Qaboos. And also, Oman is the place where I acquired a higher level of work knowledge, leadership skills, decision-making and problem-solving ability to tackle the most difficult problems faced in my career and current industry. The interest grew over the years, and I want to use this opportunity to learn and research Macroeconomics of the country, mainly to understand how the country is performing with this recent slump in the oil price market.

Background of the country

Oman population is roughly around 4.2 million; total GDP is $80.8 Billion in 2015 (Data.worldbank.org, 2015). The country ruled by sultanate from 17th Century, current head of the government is under His Majesty Sultan Qaboos Bin Said an economic reformer worked through the transformation of the country in the last 45 years. He played a significant role on developing health, education, welfare of the country and economy. The political issue is the Sultan Qaboos does not have any heir and the succession price is opaque. Traditional income of Oman was fishing and dates; fishing industry had specialized sailors, adventurers, and vast coastal area, it was only industry they had their income and revenue to country till 1955. During 1969, there was just the only 8km the road with one school and one hospital. As Sultanate of Qaboos took the powers in 1970, he opened up the oil markets, and miracles started happening, there was significant economic growth took place in last 45 years. Oman remains as the major contributor to the oil and gas industry stand 25th position in oil production (Oxford business group 2015). The country development were only around oil and gas sector due to the present situation of low oil prices, the economic conditions of the country are in serious threat.

Current Economic Conditions & Problems

Oman’s economy is heavily dependent on the oil resources which generate 75% of government revenue. National account data for the first quarter of the year reveal that the GDP at the current prices declined 14.2 percent to an increase of 2.7 percent registered during the same period in the same period in the previous year. (Cbo-oman.org, 2015)


4 | P a g e

The country has actively pursued a development plan diversification, industrialization and privatization, the primary aim is to reduce the oil sector contributions to GDP from 46% to 9% (Data.worldbank.org, 2015).

There should be a significant development needs to happen in downstream infrastructure, port expansions, logistics, tourism, service sectors, manufacturing in all region of the country. The Oman government expanded the efforts to support the development of small, medium businesses and entrepreneurship. The governments is comfortable with the short-term budget deficits and have sanctioned an expansionary 2015 budget. The government agencies were encouraging the new initiatives; raise the new businesses and the entrepreneurs on providing finances to start up. This will increase the service sector GDP alternative and will compensate the decline in the oil sector contribution. Another key important thing identified Oman sits on big global trade routes, and strategically it has a lot of potential improving the trade on existing ports and developing new ports.

With an average of 3.93 million people in Oman, the unemployment rate is estimated at 15%. The unemployment in Oman is mainly due to lack of skill workers and the method of education. So the economic growth is affected by the labor market (The Road Ahead for Oman, 2008). The Omanization program launched by Oman Government in the year of 1988, for replacing skilled foreign labor with trained Omani personnel. The Oman government plan to increase the skilled Omanis in the work sectors. And also the government issued special quota to limit the foreign workers, which is another major problem, the unskilled Omani’s productivity was affecting the private sector growth and new businesses.

Study on Macro-Economic key indicators Macroeconomic indicators are the statistical data that indicate the current status of an economy of a state developing on a particular area of the economy (Markets.com, 2015). The Major Macroeconomic indicators from 2012 to current are listed as below in table 1. The below-listed indicators are rigorously followed by everyone in the financial market and it is also needed to understand the importance of each indicator.

Table - 1

2012 2013 2014 2015

GDP growth (%) 5.8 4.7 2.9 3.2

Inflation (yearly average) (%)

2.9 1.2 2.8 2.8

Budget balance (% GDP) 4.6 8.1 3 0.2

Current account balance (% GDP)

13.3 12 9.9 5.6

Public debt (% GDP) 6.2 7.3 8.1 9


5 | P a g e

Oman HDI Index 0.781 0.783 0.785 0.783

2012 2013 2014 2015

Source (Coface.com, 2015)

Analysis of Major Macroeconomics Theory

Economic Growth and Annual Growth Rate

Gross Domestic Product (GDP)

Consumer Price Index and Inflation Rate

Budget Deficit

Government Fiscal and Monitory policy

Economic growth Oman’s economic growth strongly depends on the oil and gas sector for the past years. The country focused on spending in infrastructure projects to improve Oman’s status as a logistics center. The expansion and development projects related to building ports, airport and national railway and highway that attract foreign investors. The government also focuses on tourism, industrial manufacturing and privatization that drive to the new economic growth in the upcoming years (Oxford business group 2015).

GDP Annual Growth Rate:

The annual growth rate was consistently increasing for past ten years; and also projected to increase in upcoming years, please refer to Appendix 4. The current year the lowest growth rate was 2% of GDP recorded, and the highest was 13.1.

6 5.5

6.7

13.1

3.3

5.6

4.5

11.5

2.8

4.6

2

4

6

8

10

12

14

2005 2008 2011 2014

OMAN GDP ANNUAL GROWTH RATE


6 | P a g e

Figure 6 – Oman GDP Annual Growth Rate (Author 2015)

Gross Domestic Product (GDP) As per the national accounts data, the Oman GDP has declined 14.2 % for the first quarter of the year 2015, in contrast was an increase of 2.7 percent registered same period of last year review. (Data.worldbank.org, 2015) Oman’s economy continues to vary on the oil sector, therefore relating the GDP development to dominant drifts in the world oil market. The revenues pushing to negative, started this year budget of 0.5 billion USD surplus and now it has gone to a budget deficit of $6.97 billion in first eight months (Arabian Business, 2015). The Growth will continue to decelerate in 2015; currently country is focusing on the non-hydrocarbon sectors to be the key driver for the economic development. The next five-year plan of diversification of the economy was a solution, which the country is currently in progress development of new industries, manufacturing sectors, infrastructure projects (ports, rails, and airports) and tourism was promising steps to improve the GDP for upcoming years.

Figure 1 - GDP stats for the past ten years, source Tradingeconomics.com

Figure (1), shows the Oman GDP in US Billion dollars for past ten years. The GDP (Gross Domestic Product) was worth around 81.9 billion US dollars in 2014. The averaged GDP calculated from 1960 to 2014 is around 16.76 USD billion (Tradingeconomics.com, 2015). The country GDP is nearly doubled in last ten years.

It is clearly identified the country follows the growth theory model, which holds the growth in GDP. Concerning Annexure A, it is clearly explained that the country has the significant saving finances investment, also encourage foreign direct investment and international trade, initiating research and development, improve the quality of education among Omanian people and also provide international aid to developing countries.

31.08

37.2142.08

60.9

48.38

58.64

67.9376.34

78.1881.79

20

40

60

80

100

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

USD

BIL

LIO

N

OMAN GDP


7 | P a g e

Oman GDP consumption by end of use, the oil and gas hold 51% of the GDP, Which needs to be shifted to manufacturing and mining. Oman needs to invest and continue diversifies the economy, strengthen the growth process, continuous efforts to expand the industrial base and create jobs. Industrial and infrastructure projects will develop and compensate the economy while this oil prices is low and the GDP revenue decreases.

Figure 2 – Oman GDP Consumption

Figure 3 clearly represents the GDP consumption of the country; the import value is on a higher percentage, the country need to support the local makes and products. Government expenses

51%

37%

6%

5%

1%

Oman GDP Composition

Oil and Natural Gas

Service Sector

Manufacturing and Mining

Construction, electricity andWater Distribution

Agriculture


8 | P a g e

need to be reduced.

Figure 3 –GDP Consumption by end use

Inflation Rate

Figure 4 - Inflation Rate stats for the past one year (Author, 2015)

33.10% 21.30% 26.10%

5.90%

62.10%

-48.50%

100.00%

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

GDP CONSUMPTION BY END USE

1.020.95

0.8

0.4

0.80.7

-0.2

-0.4

0.2

0.5

0.1

-0.1

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

1.2

Oct-14 Jan-15 Apr-15 Jul-15

OMAN INFLATION RATE


9 | P a g e

Oman, consumer price index, fell 102 points in July and August 2015 the average inflation rate from Jan 2015 to Aug 2015 was 0.2 (Heritage.org, 2015), which is significantly low compared to last year. The steady decrease in the oil price goods and services cause the CPI decline. Significantly reduced this year and reached the negative some months this year, which is a serious condition of Cost-Push inflation. If the inflation will not improve next few months, if this CPI index constantly declining if it drags to negative. In next few months it will reach to the serious deflation. The below graph clearly explains if the supply decreases will increase the price in the local market when the demand is constant.

Figure 5 – Cost Push Inflation curve

The current inflation rate can lead to the economic depressions. To stop the deflation government is committed to pushing ahead on the spending the money on infrastructure projects and also the government is relying in the part on issuance of the new bond worth of $650 million to compensate the fiscal deficit almost going to be close to 10 billion USD this year (Cbo-oman.org, 2015).

Budget Deficit

Oman runs a major budget deficit this year as per the data below; it was almost equivalent to 6.5 Percent of its GDP. The decline in global energy price hit the country budget significantly. The country planned the budget expecting the oil price $75 per barrel, but the price reduced to almost $46 per barrel. And also the government expenditure are increasing, which is good thing


10 | P a g e

increase infrastructure, increase revenue, this will create job and economy.

Figure 7 - Oman Government Budget for the past ten years (Author 2015)

Annual government budgets regarding GDP for past ten years. Oman yearly administration spending plans are met through public expenditure, which regularly drives general economic development and business prospects. Given that the sultanate’s economy is still government-driven for the most part, yearly state spending plans draw in both private and wild speculation as they create total requests. One of the distinct elements of the annual spending plan improvement in the sultanate is that the administration regularly employments moderate oil costs projection. Government financial plan assets are generally determined shape continues of oil exports after some time other sources of incomes have been made (The Road Ahead for Oman, 2008).

Current Fiscal Expenditure

Oman Fiscal expenditure is more than $900 million for the past 6 months. Estimated GDP would be close to $91 Billion USD. According to Keynesian Aggregate expenditure Model increase in government expenditure, will increase the GDP.

2.6

0.3 0.20.3

-3.7

-0.2 -0.4 -0.3 -0.3

-3.4-4

-2

0

2

4

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Pe

rce

nt

of

GD

POMAN GOVERNMENT BUDGET


11 | P a g e

Figure 8 - Oman Fiscal Expenditure for the past 1 year (Author, 2015)

Taxation: Oman has no individual income tax. The corporate tax is constant 12 percent, but the income from the oil and gas sales is subject to 55 percent rate. Tax revenue equals 2.5 percent of the domestic income. Public spending is equal to 43.1 % of the percent of GDP domestic production; government debt equals 7% of GDP (Tradingeconomics.com, 2015)

Recommendation of Major Macroeconomics Theory

The macroeconomic policy aims to provide a stable economic growth, the key elements on macroeconomic policy. The goal of below policy is to provide a stable economic growth, the creation of new jobs, increase in GDP, improved wealth and sustainable growth environment.

Policy 1: Fiscal policy is a type of economic intervention where the government can inject its policies into the economy to increase the economic growth. By changing the level of spending and taxation, the government can control the total amount of goods and services in an economy.

When the economy is suffering in the recession, expansionary fiscal policy is in order. The government needs to increase their spending or tax cut, this will help to fill the recessionary gap in GDP. Tax cut option is not applicable in this country. Increase spending can occur, which will create new job opportunity, will increase the GDP. This average increase in spending will increase the aggregate demand curve. The demand curve will shift to the right AD + E, which will increase the potential GDP. And the multiplier effect will also increase the GDP

1237.6

885 922.9

4036.5

562.2787

1092.7957

1410.1

989 1091.7944.7

500

1000

1500

2000

2500

3000

3500

4000

4500

Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15

OM

R M

ILLI

ON

OMAN FISCAL EXPENDITURE


12 | P a g e

Figure 9 - (source from textbook)

Policy 2

Oman is facing the “Dutch disease”, the term derives from the decline of Netherlands manufacturing sector in 1960 after the discovery of major oil and gas field. Oman economy was boosted for last 45 years through the oil and gas industry when there is a decline in oil price the Oman economy is highly reliable on this pricing. The other manufacturing sectors, traditional fisheries, and agricultural industries has not been developed significantly compared to oil and gas. The government needs to focus on the development of these service sectors such as infrastructure development, tourism industry, traditional fishery industry, port expansions and agriculture. The government can encourage local citizens by giving a stimulus package or bank loans to start up own businesses on very small scale, mainly to improve the self-employment. Improving the self-employment within locals will reduce the unemployment rate and will increase the GDP and the country economy.

Policy 3

Efficient handling Omanization policy, there is an issue on skill set. The government is keep increasing the workforce, but there comes a question of how skillful the Omanis compared to foreign workers. Even with increased population and development work rates and to balance the high youth unemployment rates that hold on notwithstanding as of late supported monetary development rates. Oman needs to evaluate three sorts of change that will increase the growth of skilled labor market and country’s economy. The principal is transforming the education framework in a way that accentuates quality instead of quantity.


13 | P a g e

Secondly, Omani’s would be all encouraged to change its work market arrangements, including its framework of rewards and incentives to skilled labor and local Omanis. By then the young Omanis would encourage to step forward for any work in the country.

Third, to partner with education and work business sector changes, the government must change its migration arrangement in a way that screens off the low-talented and uneducated and draws in the best foreign specialists.

Conclusion

The Oman economy is expected to continue its growth, if the government plan is expenditure and investment on the infrastructure and manufacturing sectors apart from the Oil and Gas. Oman economy will be dependent on the petroleum industry until 2020; the continuous decline of oil industries is an issue. As per the policy recommendation 1, 2 the government needs to start increase his spending on new infrastructure and manufacturing industries. Developing the service sectors and self-employment opportunities for local nationals will help in long run. The banks should support the small businesses, and provide the loans for the start up. This will give local Omani’s some responsibility for their own business and will improve the economy in long term like Singapore.

.


14 | P a g e

References

Tradingeconomics.com, (2015). Oman GDP | 1960-2015 | Data | Chart | Calendar | Forecast | News. [online] Available at: http://www.tradingeconomics.com/oman/gdp [Accessed 7 Nov. 2015].

The Road Ahead for Oman. (2008). 1st ed. [ebook] Egypt: The Economic Research Forum. Available at: http://www.erf.org.eg/CMS/uploads/pdf/Oman_CP.pdf [Accessed 8 Nov. 2015].

Heritage.org, (2015). Oman Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. [online] Available at: http://www.heritage.org/index/country/oman [Accessed 3 Nov. 2015].

Cia.gov, (2015). The World Factbook. [online] Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/mu.html [Accessed 3 Nov. 2015].

Worldbank.org, (2015). Oman’s Fishery Management Dives into 21st-Century Waters. [online] Available at: http://www.worldbank.org/en/news/feature/2015/08/13/omans-fishery-management-dives-into-21th-century-waters [Accessed 3 Nov. 2015].

Bouyamourn, A. (2015). Oman faces larger than expected budget deficit this year amid ongoing oil slump | The National. [online] Thenational.ae. Available at: http://www.thenational.ae/business/economy/oman-faces-larger-than-expected-budget-deficit-this-year-amid-ongoing-oil-slump [Accessed 3 Nov. 2015].

Data.worldbank.org, (2015). GINI index (World Bank estimate) | Data | Table. [online] Available at: http://data.worldbank.org/indicator/SI.POV.GINI [Accessed 6 Nov. 2015].

Arabian Business, (2015). Oman says going for growth as cheap oil hits budget. [online] Available at: http://www.arabianbusiness.com/oman-says-going-for-growth-as-cheap-oil-hits-budget--610310.html [Accessed 9 Nov. 2015].

Indexmundi.com, (2015). Oman GDP (official exchange rate) - Economy. [online] Available at: http://www.indexmundi.com/oman/gdp_(official_exchange_rate).html [Accessed 9 Nov. 2015].

Cbo-oman.org, (2015). Central Bank of Oman. [online] Available at: http://www.cbo-oman.org/ [Accessed 10 Nov. 2015].

Coface.com, (2015). Oman / Economic Studies - Coface. [online] Available at: http://www.coface.com/Economic-Studies-and-Country-Risks/Oman [Accessed 10 Nov. 2015].


15 | P a g e

Appendix 1

2013* 2014**

1. Industry (1.1 + 1.2) $ 48,662.12 $ 53,717.30 $ 53,826.50 $ 37,924.90 $ 38,023.44 0.3

1.1 Petroleum Activities $ 36,110.88 $ 39,910.52 $ 39,535.08 $ 29,272.62 $ 29,677.70 104

- Crude Petroleum $ 33,475.52 $ 37,021.66 $ 36,522.20 $ 27,190.80 $ 27,738.10 2

- Natural Gas $ 2,635.36 $ 2,888.86 $ 3,012.88 $ 2,081.82 $ 1,939.60 -6.8

1.2 Non-Petroleum Industrial

Activities $ 12,551.24 $ 13,806.78 $ 14,291.42 $ 8,652.28 $ 8,345.74 -3.5

- Mining and Quarrying $ 256.88 $ 262.34 $ 298.22 $ 181.22 $ 196.56 8.4

- Manufacturing $ 7,747.74 $ 8,173.10 $ 8,160.88 $ 5,149.82 $ 4,707.56 -8.6

- Electricity & Water Supply $ 784.94 $ 829.14 $ 900.12 $ 641.94 $ 696.02 8.4

- Construction $ 3,761.42 $ 4,542.20 $ 5,166.20 $ 2,679.56 $ 2,745.60 2.5

2. Agriculture & Fishing $ 852.54 $ 887.38 $ 965.12 $ 742.30 $ 810.16 9.2

3. Services $ 23,285.60 $ 26,982.80 $ 29,459.04 $ 23,159.50 $ 26,083.72 12.6

- Wholesale & Retail Trade $ 4,619.16 $ 5,103.80 $ 5,309.98 $ 4,854.46 $ 4,959.24 2.2

- Hotels & Restaurants $ 442.78 $ 568.88 $ 619.32 $ 428.22 $ 464.88 8.5

- Transport, Storage &

Communication $ 3,188.12 $ 3,585.14 $ 3,819.92 $ 4,057.30 $ 4,343.30 7

- Financial Intermediation $ 2,837.90 $ 3,311.10 $ 3,596.84 $ 2,455.96 $ 2,723.76 10.9

- Real Estate & Business

Activities $ 2,679.30 $ 2,836.08 $ 3,003.26 $ 2,490.02 $ 2,647.58 6.3

- Public Administration &

Defence $ 5,027.62 $ 6,427.72 $ 7,187.96 $ 4,740.06 $ 5,415.54 14.2

- Other Services (Education,

Health, Community/Personal

Services, and Private Household)

$ - $ - $ - $ - $ -

4. Total Non-Petroleum

Activities (1.2 + 2 +3) $ 4,490.46 $ 5,150.08 $ 5,921.76 $ 4,133.74 $ 5,529.68 33.8

5. Less Financial Intermediation

Services Indirectly Measured $ 36,689.38 $ 41,676.96 $ 44,715.58 $ 32,554.08 $ 35,239.62 8.2

6. Gross Domestic Product at

Producers Prices (1.1+4-5) $ 1,387.36 $ 1,531.40 $ 1,592.76 $ 1,160.12 $ 1,230.06 6

7. Plus :Taxes Less Subsidies on

Products $ 71,412.64 $ 80,055.82 $ 82,657.90 $ 60,666.58 $ 63,687.26 5

8. Gross Domestic Product at

Market Prices (6+7)-$ 3,495.44 -$ 3,737.50 -$ 4,498.52 -$ 2,293.72 -$ 2,276.82 -0.7

$ 67,917.20 $ 76,318.58 $ 78,159.38 $ 58,372.86 $ 61,410.44 5.2

Data Source - (Cbo-oman.org, 2015)

Appendix Table 1 Gross Domestic Product at Current Market

Activities 2011 2012 2013*Jan - Sep

% change (2014/13)


16 | P a g e

Appendix 2

2013 2014

1 Food & non-alcoholic Beverages 23.903 100 102.8 102.3 104.4 2

Bread & Cereals Meat 3.02 100 100.9 100.2 102.4 2.1

Fish & Seafood 6.103 100 101.2 101.1 103 1.9

Milk , Cheese & Eggs Oil & Fats 2.208 100 107.3 107.8 117.1 8.7

Fruits Vegetables 2.865 100 100.9 100.8 101.6 0.8

Sugar,Jam,Honey & Confectionary

Food Products n.e.c.0.715 100 100 100 100.1 0.1

Non – Alchoholic Beverages 2.815 100 104.4 103.9 106.7 2.7

2 Tobacco 2.493 100 108.4 104.9 104.5 -0.4

3 Clothing & Footwear 1.135 100 99.8 99.8 99.6 -0.2

4 Housing , Water, electricity, gas

and other fuels0.521 100 100.3 100.2 100.7 0.5

5 Furnishings, household

equipment & routing household

maintenance

2.028 100 102.1 102 103.3 1.2

6 Health 0.125 100 101.5 101.5 101.9 0.5

7 Transport 5.961 100 101.8 101.8 101.8 0

8 Communication 26.477 100 100.5 100.2 101.5 1.2

9 Recreation & Entertainment 10

Education3.787 100 102.2 101.8 107.3 5.4

11 Restaurant and Hotels 1.161 100 101.5 101.1 106.3 5.1

12 Miscellaneous goods and

Services19.167 100 100.4 100.5 99.8 -0.7

5.633 100 97.7 98.8 97.4 -1.4

General Price Index 1.135 100 98.9 99 98.8 -0.1

1.368 100 104.2 102.6 109.1 6.3

6.098 100 101.1 100.9 102.1 1.2

5.185 100 100.3 100.3 100.4 0.1

100 100 101.1 100.9 102 1

Data Source - (Cbo-oman.org, 2015)

Sultanate Consumer Price Index (2012 = 100)

Appendix Table 2

Items of Consumption Weights 2012 2013

Jan - Sep

% change (2014/13)


17 | P a g e

Appendix 3

USD MILLION (USD)

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

REVENUES 3041.48 2906.8 2700.1 2513.68 4260.88 1985.1 2175.42 2202.46 1552.2 2115.62 1876.16 1739.4 1830.92

EXPENDITURE 3252.08 3737.76 2561 2415.4 10494.9 2761.72 2176.2 2841.02 2488.2 3926.26 2701.4 2968.42 2586.22

FISCAL SURPLUS (+)/ DEFICIT (-) -210.6 -830.96 139.1 114.14 -6234 -776.62 -0.078 -638.56 -936 -1810.6 -825.24 -1229 -755.3

Below currency - Omani Riyal (OMR)

Note : All currency are in Oman Riyals

2014 2015

APPENDIX 3 - SUMMARY OF CURRENT BUDGET

BELOW TABLE SOURCE (Cbo-oman.org, 2015)


18 | P a g e

Appendix 4


19 | P a g e

Markets Actual Q4/15 Q1/16 Q2/16 Q3/16 2020 Units

Currency 0.39 0.4 0.4 0.41 0.41 0.35

Stock Market 5900.32 5710 5540 5370 5250 6410 Index Points

GDP Actual Q4/15 Q1/16 Q2/16 Q3/16 2020

GDP 81.79 90.08 91.77 93.45 95.14 119 USD Billion

GDP Annual Growth Rate 4.6 3 3.2 3.3 3.19 2.88 percent

GDP Constant Prices 25533.3 26296 26477 26657 26838 29415 OMR Million

GDP per capita 12471.98 12068 12000 11931 11862 13018 USD

Gross Fixed Capital Formation 8517.3 8685 8668 8650 8632 10627 OMR Million

GDP per capita PPP 41769.84 40511 40373 40235 40098 39537 USD

GDP From Agriculture 406.1 479 494 509 524 705 OMR Million

GDP From Construction 2054.3 2498 2622 2745 2869 4089 OMR Million

GDP From Manufacturing 3151.9 3077 3048 3018 2989 2320 OMR Million

GDP From Mining 124.5 130 132 133 134 153 OMR Million

GDP From Public Administration 3163.9 3524 3610 3696 3781 5085 OMR Million

GDP From Services 12814.5 13682 13887 14091 14296 15340 OMR Million

GDP From Transport 1574.7 1614 1622 1631 1639 1547 OMR Million

GDP From Utilities 376.2 440 450 460 470 613 OMR Million

Gross National Product 29984.8 32450 32926 33401 33877 41105 OMR Million

Labour Actual Q4/15 Q1/16 Q2/16 Q3/16 2020

Unemployment Rate 15 15 15 15 15 15 percent

Population 3.93 4.16 4.2 4.24 4.28 4.4 Million

Prices Actual Q4/15 Q1/16 Q2/16 Q3/16 2020

Inflation Rate -0.1 0.5 1.19 1.71 2.44 2.7 percent

Consumer Price Index CPI 102.3 102 102 102 102 102 Index Points

Food Inflation -1.15 -0.85 -0.85 -0.85 -0.85 -0.85 percent

Inflation Rate Mom -0.29 0.14 0.07 0.09 0.08 0.08 percent

Producer Prices 110.9 95.97 93.71 87.42 85.9 74.88 Index Points

Producer Prices Change -13.9 -8.8 -6.22 -6.46 -6.92 -9.12 percent

Money Actual Q4/15 Q1/16 Q2/16 Q3/16 2020

Interest Rate 1 1 1 1 1 2.5 percent

Money Supply M1 5256.8 5265 5246 5235 5237 5235 OMR Million

Money Supply M2 14618.3 14704 14705 14704 14706 14708 OMR Million

Foreign Exchange Reserves 6625.6 6337 6416 6387 6355 6521 OMR Million

Loan Growth 10.6 11.93 12.52 12.96 13.25 13.79 Percent

Money Supply M0 1665 1767 1804 1842 1879 2475 OMR Million

Trade Actual Q4/15 Q1/16 Q2/16 Q3/16 2020

Balance of Trade 198.7 356 405 446 480 272 OMR Million

Exports 1193.4 1218 1198 1188 1178 1349 OMR Million

Imports 994.7 942 934 926 918 996 OMR Million

Current Account 1559 1408 1594 1780 1966 2107 OMR Million

Current Account to GDP 5 6.35 6.53 6.7 6.87 7.43 percent

Gold Reserves 0.03 0.03 0.03 0.03 0.03 0.03 Tonnes

Crude Oil Production 960 963 963 963 963 963 BBL/D/1K

Capital Flows -789 -777 -615 -454 -292 -797 OMR Million

Foreign Direct Investment 284 260 270 279 288 383 OMR Million

Government Actual Q4/15 Q1/16 Q2/16 Q3/16 2020

Government Budget -3.4 -0.76 -0.69 -0.63 -0.56 -1.94 percent of GDP

Government Debt to GDP 4.8 6.12 6.53 6.94 7.36 4.68 percent

Government Budget Value -290.5 -41.69 149 336 517 -183 OMR Million

Government Spending 5723.4 5916 5956 5997 6038 6519 OMR Million

Credit Rating 75

Fiscal Expenditure 944.7 1182 1187 1182 1183 1183 OMR Million

Government Debt 1526.3 1546 1549 1552 1555 1579 OMR Million

Government Revenues 704.2 819 821 821 821 821 OMR Million

Business Actual Q4/15 Q1/16 Q2/16 Q3/16 2020

Changes in Inventories -1886.2 -193 -200 -208 -215 -374 OMR Million

Competitiveness Index 4.25 4.46 4.46 4.46 4.46 4.43 Points

Competitiveness Rank 62 45.46 45.46 45.46 45.46 48.62

Corruption Index 45 45.32 45.35 45.38 45.42 45.54 Points

Corruption Rank 64 62 61 60 59 48

Ease of Doing Business 70 65 64 63 63 59

Consumer Actual Q4/15 Q1/16 Q2/16 Q3/16 2020

Consumer Confidence 97.1 106 112 116 119 126

Private Sector Credit 15774.3 16217 16418 16553 16635 15591 OMR Million

Taxes Actual Q4/15 Q1/16 Q2/16 Q3/16 2020

Corporate Tax Rate 12 12 12 12 12 12 percent

Personal Income Tax Rate 0 0 0 0 0 0 percent

Appendix 4 - Oman Economic Forecasts 2015-2020 Outlook: Source - (Tradingeconomics.com, 2015)

macro economic paper submission 21601971- rev1.pdf

Documents

economic growth

economic key indicators

gross domestic product

inflation rate