How is Oman's economy changing its face in the context of modern challenges?

The economic history of the Sultanate of Oman

The economic dynamics of the Sultanate of Oman are closely intertwined with the economic indicators of its neighbors, among which the United Arab Emirates, Saudi Arabia, Qatar, and Bahrain stand out. For centuries, the local population has engaged in various crafts: jewelry making using precious metals, pearl fishing, and the production of traditional daggers characteristic of the region have formed the basis of their traditional labor.

For a long time, Oman was under the influence of Great Britain, which created certain obstacles to its economic development and maintained an agrarian way of life. However, since the discovery of oil fields in 1964, the situation in the country began to undergo significant changes.

The impact of oil resources on the economy

The technological reserves of oil resources have transformed the situation in the region, making Dubai one of the leading financial centers in the world. These resources have allowed Qatar to host the World Cup, while Oman has significantly improved the standard of living for its population.

As of today, the gross domestic product per capita is21.27 thousand dollarsAlthough this figure cannot compete with the higher numbers of other Gulf countries, such as Qatar with81.97 thousand dollarsHowever, there is an impressive positive trend. In 2006, this indicator barely crossed the mark of$15,000..

The stability of Oman's economy

Despite the economic challenges facing the global economy, Oman is showing greater resilience than many experts had anticipated. In 2022, following the COVID-19 pandemic, the country's economic activity began to recover, and according to the Central Bank of Oman, nominal GDP increased by30%A significant part of this growth can be attributed to the development of the oil industry.

• The GDP generated from hydrocarbons has increased by61.6%
• The non-oil sector has expanded by16.9%

Oil prices and the budget

According to statistical data, the average price of Omani oil was95.4 dollarsfor a barrel, what's on50%more than in the previous year. Increased oil revenues contributed to the formation of reserves in the economy, allowing Oman to announce a positive budget balance for the first time since 2014.

Comparison with other countries in the Middle East

However, it is worth noting that Oman does not fit the usual stereotypes about Middle Eastern countries, where prosperity is solely based on oil revenues. According to the World Trade Organization, in 2020, the share of the oil and gas sector in the total GDP was26.2%while in Saudi Arabia this figure reached46%.

Economic diversification

Thus, it can be concluded that Oman is successfully taking steps to diversify its economy. The non-oil sector has shown growth at the level of23.5%In 2022. Current issues related to investments, immigration, and real estate can be actively discussed on our Telegram channel, where relevant topics related to non-oil sectors are addressed.

Transition to sustainable energy sources

In the modern world, there is a significant trend towards transitioning to sustainable and environmentally friendly energy sources. Oman is also participating in this transformation. In 2022, the production volume in sectors that are less dependent on carbon increased by16.9%The banking sector plays a key role in the process of economic diversification, becoming an important tool for attracting investments and opening new horizons in the economy of the Sultanate.

Economic dynamics of Oman in 2022

In 2022, Oman's economy showed stable growth, driven by rising interest rates both domestically and internationally. Increased oil and gas prices, as well as the revival of economic activity following the COVID-19 pandemic, also played a significant role in this process.

The banking system of the country

There are twenty banks operating in Oman, half of which are local institutions, while the other ten are foreign. Additionally, several financial organizations providing Islamic banking services operate in the country.

Bank profits in 2023

According to the latest data, the net profit of banks in Oman in 2023 amounted to 1.06 billion US dollars, representing a growth of 20.7%.

The list of banks operating in the Omani financial market includes:

• Oman Arab Bank
• State Bank of India
• Bank Barody
• Beirut Bank
• Iran was in the spotlight.
• Sokhar S.A.O.G
• HSBC Middle East
• Al Ahli Bank S.A.O.G
• Standard Chartered Bank
• Qatar National Bank
• National Bank of Abu Dhabi
• Nizva Bank
• Habib Bank Limited
• Oman Development Bank
• Central Bank of Oman
• Al-Izz Islamic Bank
• Dhofar Bank
• Oman Housing Bank
• Maskat Bank
• Saderat Iran

Financial indicators of the banking system

In 2022, Oman's banking system demonstrated an improvement in its financial indicators. The total assets of the institutions increased by 1% and amounted to 100.8 billion USD. The total amount of loans issued reached 75.85 billion USD, while non-performing loans at the end of December 2022 stood at 4.4%.

According to forecasts from Moody's, the situation in the country's banking sector remains stable. Further growth in revenues from the oil and gas sector is expected, as demand for energy resources will increase, especially from countries like China, India, and European states amid the ongoing conflict in Ukraine.

Investment opportunities for foreigners

It should be noted that foreign investors, including Russians, have the opportunity to open accounts in local banks provided they purchase real estate with a down payment of 10%. The account opening procedure is conducted in riyals and takes between 14 to 21 days, which provides access to the most significant financial markets in the world, including Europe, the USA, the Middle East, and Asia.

The service sector in the economy

In 2022, the services sector in Oman saw a decrease in its share of the economy from 50.5% to 44.5%. However, the volume of services provided increased by 14.5%. This indicates that the reduction in the share of services is due to the overall growth of the economy, rather than a decline in the sector.

The analysis of the country's central bank shows that activity in the service sector has increased due to rising demand for logistics, including transportation and warehousing services. There has also been a significant rise in the performance of the restaurant and hotel industry, as well as the wholesale and retail sectors, which have shown a growth of 20%.

Real estate market and foreign investments

In terms of the real estate sector, its share in the structure of foreign direct investment (FDI) is only 5.3%, which is lower than in other industries. In comparison, the manufacturing sector and financial services attract 7.9% and 7.6%, respectively.

General data on the influx of foreign investments in Oman shows the following distribution:

• Oil and gas industry:72.2%
• Finance:7.6%
• Industry:7.9%
• Real Estate:5.3%
• Other sectors:7.1%

These figures highlight the strategic importance of the oil and gas sector for Oman's economy, which remains a key driver for the country's further development.

Foreign investments in Oman

In 2022, the central bank of Oman published results indicating that investments were made in the country's commercial and residential real estate.2.7 billion US dollarsThe main investments came from investors fromUnited Kingdom,U.S.andUnited Arab Emirates...which highlights their significant influence on the economic landscape of Oman. These three countries continue to hold leading positions among foreign participants in the local market.

Housing rental and the construction sector

Moreover, according to statistics from the Omani bank, there is a noticeable increase in interest in renting housing. This is related to the growing number of foreign specialists who make up43.4%of the entire population of Oman. However, the construction sector faced a decline in23.2%In 2022, however, positive changes began to emerge in 2023, indicating a recovery in the construction market, which is encouraging for the local economy.

Purchase of real estate by foreigners

It should be noted that foreigners have the opportunity to purchase real estate in Oman exclusively in specialized integrated tourist complexes.ITCAs of today, there are functioning in the countryfoursimilar complexes, and the government intends to increase this number by19 new projectsIn the coming years, this will create additional opportunities for investment.

Attractive offers in the real estate market

As for the current real estate offerings in Oman, one of the most enticing is a villa inMascatecost1,106,694 eurosThis luxurious property has a total area of288 square meterslocated at an altitude130 metersabove sea level in a closed elite community, surrounded by picturesque landscapes and featuring a developed infrastructure for active leisure. Conveniently located justin 20 minutesfrom the center of the capital and25 minutesThe proximity to the airport makes this villa especially attractive to buyers.

Villas in Salalah

• There is inSalalahan interesting villa priced at513,296 eurosThe area of this villa is181 square metersand it is designed with a focus on wellness elements.
• This villa is located in a picturesque area, providing residents with stunning views of the ocean.
• Residents of this complex can enjoy a private beach and gain membership in an exclusive beach club, ensuring a comfortable and pleasant stay.

Another villa in Salalah

There is another villa project in Salalah with similar characteristics, but at a different price.675,892 eurosIt offers its residents all the benefits of a wellness lifestyle, with a special focus on comfort, nature, and opportunities for relaxation.

Apartments in a prestigious complex

Apartments are also available in a prestigious complex on the real estate market.Mandarin Orientalin Muscat. These luxurious apartments with an area of134 square metersthey are standing989,542 eurosand inspire admiration thanks to a wide range of amenities and panoramic views of the sea and majestic mountainsHajar.

The complex offers a high level of service and is managed by a renowned hotel company, which adds extra value to living in such apartments.

Conclusion

Thus, the real estate market in Oman offers a variety of interesting options for both purchase and rental, making it an extremely attractive place for foreign investors and expats seeking comfortable living conditions in this unique region.

Real estate in Oman

Real estate in Oman, especially in its capital Muscat, is becoming an increasingly attractive destination for investors. One of the most notable projects is Mandara Oriental, featuring apartments with stunning panoramic views of the sea and the majestic Hajar Mountains. These living spaces have an area of 82 square meters and include a comfortable bedroom, as well as balconies of 7 sq.m. and a terrace of 32 sq.m.

Variety of offers

However, the real estate offerings are not limited to just these apartments. Among the listings, you can find villas, the prices of which start at765,071 eurosand an area of 357 square meters, which embodies a unique blend of cultural traditions and modern conveniences. This rapidly developing tourist region stands out for its stable economic environment and favorable living conditions, such as the absence of income tax. Here, you will have the opportunity to experience firsthand the dynamic life of one of the most picturesque areas in the country.

Other opportunities in the real estate market

The real estate market offers many other investment opportunities.

Residential complexes in Muscat

In the capital of Oman, Muscat, impressive apartments are available at a price.459,778 €, which have an area138 square metersThey consist of one bedroom and a bathroom. These properties are classified as "approved investment" by Velesclub and are located in a luxurious complex in Al-Muj, near the only 18-hole golf course in the country that meets international standards.

The complex and hotel are built on a picturesque coastline that stretches for360 meters...and in close proximity are a yacht marina, a park, and a shopping center, which makes this offer especially appealing for those who value an active lifestyle and comfort.

Apartments in Salalah

Another outstanding opportunity is the apartments in Salalah with an area of58 square meters, at a cost of186,578 €, which also received the status of "approved investment" from Velesclub Int. These residences are located in the new resort community of Hawana Salalah, situated on the shores of the Arabian Sea.

They are perfect for those who appreciate seaside relaxation all year round, as there are many restaurants and entertainment venues nearby, making the stay more convenient and comfortable.

Additional attractive options

Among the additional attractive options, apartments in Muscat with an area of140 square metersat the price780,846 €with the possibility of remote transactions and payment in rubles. This modern complex is located on the waterfront in a prestigious area of central Muscat.

The elegant facade, reflecting the beauty of the sea waves, connects the main buildings and creates a harmonious space. On the area of46,835 square metersLuxurious residences are available, fully furnished, with round-the-clock service and a variety of à la carte services.

Elegant apartments

Stylish apartments in Muscat with a total area are also a bright offer.423 square meters, standing2,207,728 €These apartments can be purchased through a remote transaction that allows payment in rubles. They are located in a prestigious complex and are designed in a refined futuristic style that beautifully highlights the sea waves.

The apartments are located on the same plot.46,835 square metersoffering a wide range of infrastructure facilities, including:

• Guerlain Spa
• Pools
• Modern fitness centers

Apartments in the Muscat Bay area

Luxury apartments are offered in the Muscat Bay area, with an area of115 square meters, the price of which is427,594 €These apartments are just a few minutes away from the vibrant city center. This location successfully combines tranquility with a developed infrastructure, offering significant amenities for residents.

The complex includes:

• Elite 5-star hotel Jumeirah Resort
• Pools
• Fitness centers
• Picturesque green parks for relaxation

The project "The Great Escape"

Additionally, it is worth paying attention to the apartment with an area of53 square metersin Muscat, at a cost of220,827 €This object is located in the "The Great Escape" project, which occupies a vast area in3.5 million square meters.

Among the features:

• 18-hole golf course managed by the Trump Organization
• The perfect place for golf enthusiasts.
• Beautiful views of the bay from above130 metersabove the level of Oman
• Various opportunities for outdoor activities

Apartment in Muscat

The apartment being offered for €333,050 in Muscat, Oman, spans an impressive 91 square meters and includes 3 bedrooms and 2 bathrooms, as well as providing 2 parking spaces. This residential complex, named Aida The Great Escape, is situated on a stunningly expansive area covering 3.5 million square meters.

Here, surrounded by stunning nature, lies a luxurious 18-hole golf course managed by a renownedTrump Organization...which creates perfect conditions for enthusiasts of this sport. The complex is located 130 meters above the Gulf of Oman, offering its residents breathtaking views and an atmosphere that fills the home with light and freshness.

Villa in Oman

In Oman, there is also a villa available for 1,186,695 euros, with a total area of 288 square meters. It includes 4 bedrooms and 3 bathrooms. This new project, known as Aida Oceana Muskat, was recently completed and beautifully blends with the natural surroundings of the city.

The residential complex offers its residentsexclusive lifestyleand opportunities for outdoor activities, including access to the Darglobal golf club, which is at the same elevation of 130 meters.

Environmental initiatives

The developers are also actively working on the project.Eco-City The Sustainable City – Yitiwhich sets an ambitious goal of creating an eco-city with zero harmful emissions. Construction work has already begun, and real estate sales have started, which is a good sign for the implementation of this multifaceted idea.

Apartment in Salalah

Additionally, there is an apartment in Salalah, priced at 228,878 euros and covering an area of 73 square meters, which includes 2 bedrooms and one bathroom. This project, called Amazi, features 4 residential areas with luxurious chalets and villas on the shores of the Arabian Sea, perfectly suited for those who want to spend time in a relaxing atmosphere and recharge in their own family home located on kilometers of white sandy beaches.

Oman Vision 2040

According to the programOman Vision 2040Proclaimed by Sultan Haitham bin Tariq Al Said, Oman is striving for a completely new vision for its future. This initiative encompasses various aspects of life and emphasizes the importance of national interests.

• The unification of efforts of all citizens of the country to achieve the set goals.
• Programs for the development of neighboring countries in the Middle East, such as UAE Vision 2031 and Saudi Vision 2030.

Countries strive to improve the quality of life and strengthen their positions on the international stage by creating a strong media resonance and emphasizing the relevance of progress. These initiatives become real vectors for governments and create a solid platform for further successes.

Prospects for Oman's economic development until 2040

The prospects for Oman's economic development on the horizon up to 2040 present an intriguing topic, highlighting the country's ambitious plans to transform its economic structure. One of the key tasks outlined in the Vision strategy is to...diversification of the economyOman recognizes the importance of resilience to economic changes, especially considering the lessons learned from the history of the well-known collapse of the Soviet Union, which found itself in a difficult situation due to its high dependence on the oil industry.

Reduction of the oil sector's share

As of 2017, the share of the oil sector in Oman's gross domestic product (GDP) was 39%, but according to preliminary data for 2020, this figure decreased to 26.2%. Forecasts for 2040 suggest a further reduction to 8.4%. In a short period of three years, the country has made significant progress in reducing its dependence on hydrocarbon resources, decreasing it by approximately 13%.

Ambitious goals for the future

In addition, Oman has set ambitious goals for itself: to become one of the twenty most...competitive economies of the worldOne of the key indicators for assessing this success is the ratio of the current budget deficit to GDP, which today stands at 1.5%. The government intends to almost completely pay off its debts, while the overall ratio of government spending to GDP is 25%.

Development of the local workforce

Unlike a number of neighboring countries, such as Qatar or the United Arab Emirates, Oman aims not to create an economic model that focuses solely on attracting foreign labor. The government has set a goal for 40% of jobs in the private sector to be held by Omani citizens by 2040. This initiative has been in development since 1988 and involves establishing quotas for various sectors of the economy to regulate the ratio of Omanis to foreign workers.

• Companies that meet the established criteria can expect special recognition.
• The awards include obtaining a "green card," which opens up additional opportunities for interaction with the government.

Focus on education

The Sultanate is also actively developing the education sector by opening universities that train qualified personnel for the local population. In addition, the country has programs aimed at attracting wealthy foreigners through investment immigration, which simplifies the process of obtaining residency permits when purchasing real estate in tourist complexes, with prices starting from $200,000.

The unique situation of Oman

Oman is facing a unique situation: on one hand, the country has significant opportunities to attract foreign investments, while on the other, it suffers from a lack of recognition on the international stage. Increasing the brand awareness of Oman could help attract a larger volume of investments, including in the real estate sector.

Transition to an independent economic model

The main task for Oman and the entire Middle Eastern region is to transition to an economic model that is not dependent on oil. To achieve this, extensive programs have been developed, such as Vision, and environmental summits and regular conferences are held to address current issues and explore solutions.

Banking system and investments

Oman's banking system is characterized by high reliability and is integrated into a broader financial architecture both regionally and globally, including Europe and the United States. Investing in real estate in Oman opens up opportunities for opening bank accounts and obtaining residency, making the country particularly attractive for foreign investments.

Conclusion

In conclusion, it can be confidently said that the economic landscape of Oman has undergone significant changes in recent decades, allowing the country to adapt to new challenges and opportunities. Although Oman is traditionally associated with oil extraction, its economic structure is now much more diversified, which brings hope for sustainable growth in the future.

Comparing with neighboring countries may seem unfavorable, especially in the context of GDP per capita, but it is worth noting that Oman is full of ambitions and aspirations to develop non-oil sectors, which could ultimately lead to an improved standard of living for Omanis. I firmly believe that the development of the banking sector, along with initiatives for transitioning to green energy, will create conditions for sustainable economic growth and increase the influx of foreign investments.

The role of services and the real estate sector

It is also important to consider the role of services and the real estate sector in creating a more favorable business climate. The sustained demand for transportation and logistics services also highlights changes in consumer behavior, which in turn opens up new opportunities for business and entrepreneurship.

Key factors of sustainable growth

In light of global changes, including the significant impact of rising oil prices and the economic recovery after the pandemic, I believe that Oman has every chance of becoming one of the key players in the economic arena of the Middle East.Stability of the banking system,diversity of economic sectorsandambitious plans for infrastructure improvementThey are opening new horizons for both local and foreign investors.

Prospects for the future

Thus, by filling the gaps in its economy and taking active measures for diversification, Oman demonstrates an example of how the right strategy can not only improve the current economic situation but also lay the groundwork for future prosperity. The anticipated further integration with international markets and the recognition of the importance of sustainable development are key factors contributing to the ongoing progress.

The path ahead will undoubtedly be filled with both challenges and opportunities.