Omans foreign trade witnessed a 9.1 per cent increase rise at RO 19.84 billion in the total value of commodity exports at the end of November 2013. This was RO 18.18 billion during the corresponding period in 2012. According to National Centre for Statistics and Information (NCSI), the increase is mainly thanks to a 3.4 per cent increase in the oil and gas export commodities, amounting to RO 13,093.4 million at the end of November 2013, compared to RO 12,668.2 million at the end of December 2012. During the period, Omans oil exports to Indian markets recorded a remarkable growth. Markets in China were a close second recording a growth rate of 28.6 per cent in imports of oil from Oman.
On the other hand, Japan, South Korea, Thailand, Taiwan and Singapore markets saw a decline in imports of Omani crude as a result of lower demand.
Omans non-oil exports also increased by 7.1 per cent at the end of November 2013 to RO 3,492.2 million compared to RO 3,260.1 million during the corresponding period in 2012. Re-export trade also rose by 44 per cent to hit RO 3,252.4 million as compared to RO 2,258.2 million in 2012. Meanwhile, Moodys Investors Service in its latest MENA sovereign outlook report said that Omans fiscal break-even oil price is the second highest in the GCC after Bahrain, and is on an upward trend.
It said that Omans public expenditure increase has already outpaced new revenue, and its fiscal break-even oil price is estimated to be closer to $100 per barrel (bpd) in 2014. In the GCC, the outlook for 2014 points to diminishing fiscal space, with actual and fiscal break-even oil prices converging. As a result, and in order to avoid deteriorating fiscal balances, the GCC governments will have to start tightening their fiscal stance, particularly countries like Bahrain and Oman that face higher fiscal break-even oil prices, Moodys said.
In the past three years, the high oil prices have been accompanied by large increases in fiscal spending in the GCC countries, although they were more than offset by additional revenue. Between 2010 and 2013, we estimate that government expenditures increased more than 70 per cent in Oman and Qatar, and about 40 per cent in Bahrain and Saudi Arabia, the ratings agency said. For 2014, Moodys expects expenditure growth to slow in the GCC, and fiscal break-evens oil prices will continue to converge with actual prices. Apart from Bahrain, we do not expect the GCC countries fiscal accounts to be in deficit; nevertheless, should it occur, governments would likely use their reserve buffers and prioritise current over capital spending, the report said. Bahrain, Saudi Arabia and Oman, the three countries with the lowest GDP per capita in the GCC saw their fiscal break-even oil prices rise by more than US$50bpd, and a lot more for Bahrain, between 2003 and 2014, while Kuwait, Qatar and the UAE had more moderate increases, around $35 for all three countries, Moodys added.