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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2005
MUSCAT SECURITIES MARKET
ECONOMIC AND POLITICAL DEVELOPMENTS
Politic and Economic Environment:
Oman has been launching a massive drive
to build the basic infrastructure facilities and
improve living standards of its citizens since
1970. The key economic indicators such as
Gross National Product (GNP); Gross
Domestic Product (GDP); per capita income;
money supply (M3); trade balance and
foreign currency reserves indicated
remarkable growth in 2004.
The policy response of Oman to the
changing international and domestic
economic conditions is marked by its clearcut
willingness to adjust and remain flexible.
Oman's fiscal position has been showing
considerable growth since the 1970s.
The nation has witnessed noticeable
economic achievements in 2004 that are
reflected in its modern physical
infrastructure. Considerable progress in
basic health and education systems and the
improvement in standard of living have been
commendable.
Key Information Contacts
Ministry of National Economy www.moneoman.gov.om
Capital Market Authority www.cma-oman.gov.om
Oman Chamber of Commerce and Industry www.cbo-oman.org
Financial Corporation www.fincorp.org
National Bank of Oman www.nbo.co.om
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Economic Performance:
According to provisional estimates, the
domestic economy registered a record
12.5% growth in 2004 as against 6.9%
recorded in 2003. A sharp increase in oil
prices brought windfall profits for Oman in
2004. Oman crude realized an average price
of US$ 33.9 a barrel last year compared with
the budgeted price of US$ 21.0 a barrel, an
increase of US$ 12.9 a barrel. The government
had increased public expenditure by another
US$ 784 million during the year, resulting in
a higher deficit of US$ 2.1 billion as against
the budgeted deficit of US$ 1.3 billion.
Though the oil revenues were estimated at
US$ 4.3 billion, it grew by a whopping
US$ 3.3 billion to US$ 7.6 billion. Thus the
total actual revenues rose by nearly 43% to
US$ 10.9 billion as against the estimated
US$ 7.6 billion. Oil revenues contributed
more than 69.5% of total income in 2004.
From the additional revenues of US$ 3.3
billion, the total exposure is US$ 2.5 billion,
comprising budgeted deficit of US$ 1.3
billion, additional allocations of US$ 784
million and payment of foreign debts of US$
539 million. The remaining surplus amount is
expected to be reserved as additional
resources for the government.
The actual public expenditures in 2004 were
US$ 9.6 billion. The increased revenues
indicate that the government’s estimates of
US$ 7.6 billion revenues were conservative
and prudent, based on conservative oil price
forecast of US$ 21.0 per barrel. The record
revenues achieved in 2004 will help
government continue its ongoing economic
reform programs and other development
initiatives. Oman’s external debt position
comfortably stands at US$ 3.4 billion as
against staggering debts of many other
countries in the region. The excess of
planned aggregate expenditure of US$ 9.6
billion over budgeted revenue receipts of
US$ 8.0 billion leaves a deficit of US$ 1.4
billion for 2005. The deficit represents 17% of
total revenues and 6% of GDP. The 2005
current expenditure of US$ 7.2 billion
accounts for 75% of total expenditures, with
investment spending (US$ 2.3 billion) and
support to private sector (US$ 171.9 million)
taking the remaining 25%. The oil price
estimated for 2005 budget at US$ 23 a barrel
also seems lower than the expected actual
realization.
OMAN MACROECONOMIC ACTIVITY
TRADE BALANCE (GOODS & SERVICES), NATIONAL INCOME PRODUCTS ACCOUNT (US$ Millions)
1998 1999 2000 2001 2002
Exports 5,797 7,638 11,743 11,423 11,767 E
Imports 6,848 5,810 6,159 6,988 7,199 E
Trade Balance -1,051 1,828 5,584 4,434 4,568 E
* Economic Overview, Country Watch Incorporated, 2005