The Central Bank has yet to release data for real GDP in 2009. We estimate that real GDP will have grown by 4.1% in 2010, owing to an increase in oil production. According to the national economy ministry, oil production averaged 860,800 b/d in the first ten months of 2010, owing to EOR techniques. We forecast that economic growth will average 4.5% in 2011-12.

The Omani economy will remain vulnerable to any downturn in domestic oil production and to fluctuations in oil and gas export prices. GDP growth will continue to rely on the hydrocarbons sector, but as oil extraction becomes increasingly difficult and expensive, the diversification programme will become more important. Oil and gas accounted for just over 40% of GDP in 2009 (compared with just over 50% in 2008). Liquefied natural gas (LNG) production will rise modestly over the forecast period, but insufficient gas reserves mean that even with plans for a fourth LNG train, exports will remain subdued. The expansion of ports, the diversification into manufacturing such as aluminium and the development of tourism infrastructure will boost non-oil exports. However, inconsistent data regarding population, especially growth in the expatriate population, as revealed by the preliminary results of the 2010 census, make economic planning more difficult. A major downside risk to our growth assumptions is the shortage of gas supplies; gas is used in EOR, desalination and electricity generation for heavy industries such as aluminium and fertilisers.