Oman

PricewaterhouseCoopers has been operating in Oman for over 30 years providing a broad spectrum of services to its clients ranging across Assurance, Business Advisory and Tax services.

Oman's economic performance in 2007 remains impressive showing strong economic growth, creation of additional job opportunities, large surpluses in fiscal and balance of payments positions, and stable domestic monetary and financial conditions. Nominal GDP growth at 12.9 percent in 2007 represented a phase of robust growth over four consecutive years. In an effort to diversify its economy and reduce Oman's reliance on oil, the growth process was also driven by non-petroleum activities, which registered a growth of 8.3 percent in 2007 as well as 58.9 percent growth in Oman's non-oil exports. In common with other countries in the Gulf region, inflation remained as the key macroeconomic policy concern in 2007. Inflation rates were 5.9 percent in 2007 and 10.4 percent in the first quarter of 2008.

With 70 percent of ownership available to foreign investors, Oman has also been attracting a large amount of foreign investment. The government has outlined initiatives to modernise the local economy and privatise state utilities. A significant increase in government spending and foreign direct investment has led to the development of the following sectors:

Oil and gas - Oil and gas activities continued to dominate the economic performance of Oman in 2007, accounting for about 45.3 percent of nominal GDP, 62.1 percent of net fiscal revenues, and 58.4 percent of merchandise exports. Oil and gas related services have also increased considerably in recent years. Despite the gradual decline in oil production since 2001, the continued dominance of this sector in the economy has been due to the surge in oil prices in the last few years.

Construction and infrastructure - As a result of large scale public and private investment in infrastructure development, industrial, tourism and commercial property projects, construction sector output grew by 34.7 percent in 2007. It is expected that new investment of about RO1.2 billion in both the public and private sectors will be made in five major projects in Sohar, which is set to become the country's industrial centre. The government also intends to attract high-technology investors to free zones being developed in Muscat and Salalah.

Telecoms - A twenty percent flotation of Omantel (the country's sole fixed line and first GSM operator) and the granting of a second GSM licence has opened the telecommunications market in Oman to further development. Oman has one of the lowest mobile penetration rates in the GCC of about 30 percent, and with a growing per capita GDP, the telecom market is showing increased activity.

Real estate and tourism - As with other GCC countries, Oman has seen a number of significant developments in this sector, including the establishment of several integrated tourism complexes and an increase in the number of tourism-related projects such as golf courses and hotels.