An agreement between Oman’s government and Chinese investors to develop a new US$10.7 billion industrial city near the port of Duqm will help Oman’s flagging construction sector, which is expected to this year post its slowest growth since 2000, according to BMI Research.
BMI said that projects such as the Sino-Oman Industrial City will help to underpin growth for construction in Oman, which it expects to accelerate from a growth rate of 2.4 per cent this year o 4.9 per cent by 2019.
The firm said that international investors, in particular from China, will fill a funding gap in Oman’s industrial sector that has been caused by the oil price plunge and the government’s inability to directly finance work. Oman is expected to run an average fiscal deficit of 11 per cent of GDP over the next five years, according to BMI.
"Although Oman possesses a degree of private investment in its construction sector, the state still plays a pre-eminent role in funding infrastructure projects, and as oil accounts for approximately 85 per cent of government revenue, the collapse in price has had a negative impact on its ability to finance projects," said David Lee, an infrastructure analyst covering Oman for BMI Research.