(MENAFN - Muscat Daily) Muscat- Oman's real GDP growth is expected to accelerate this year as a result of rising oil and gas production and robust fixed investments, according to Fitch Solutions Group, an affiliate of Fitch Ratings.
As per Fitch Solutions' forecasts, Oman's real GDP is expected to grow by 2.7 per cent in 2019, up from 2.4 per cent in 2018.
In its Middle East Monitor report, Fitch said Oman's hydrocarbon production is set to rise considerably in 2019, in spite of OPEC's recent decision to reimpose supply restrictions from first quarter of 2019. 'Our oil and gas team forecasts Oman's crude oil production to rise by 3.1 per cent in 2019, from 0.5 per cent in 2018, contributing to strongly improved net exports. Most of this production will come online in the second half of the year, and will largely stem from investments in enhanced oil recovery at maturing fields.'
'Natural gas production from the large Khazzan field is also on track to continue expanding in 2019, although we caution that gains will be considerably smaller than they were in 2018', Fitch added.
It said that major private investments are on track to be implemented over the coming quarters as part of Oman's wide-ranging economic diversification programme. Fitch forecasts the construction sector to grow by 11.5 per cent in real terms in 2019, from 10.4 per cent in 2018 – second only to Qatar among the GCC countries.
'Major projects currently being undertaken include the US$7bn Duqm Refinery and Petrochemicals Complex, set against a 2021 deadline, which recently secured US$4.6bn of multi-source financing; further projects include the US$6bn Liwa Plastics Industries Complex, due for completion in 2020. These projects will contribute to relatively steady progress on the country's broader diversification agenda, which aims to boost output in the manufacturing, tourism and logistics sectors,' Fitch said.
Fitch believes that Oman's fiscal deficit will narrow only slowly over the coming quarters as weakening oil price growth restricts further revenue gains. It expects the sultanate's fiscal deficit at 7.4 per cent of GDP in 2019, down from 8.7 per cent in 2018.