Oman Observer reported that the national economy showed robust growth in spite of the severity of the international financial and economic crisis that affected most of the advanced economies.

Mr Darwish bin Ismaeel al Balushi, minister responsible for financial affairs, said that "This strong performance is attributed to the increase in the rates of the oil production, the remarkable improvement in its prices and the expansionary fiscal and monetary policies adopted by the government."

Non oil activities recorded strong growth in 2011. The growth in national economy is based on the added value of the non oil activities that are projected to achieve a growth rate of 10% compared with 2% for the oil activities. This is also attributed to the increased domestic demand as well as the increased non oil exports by 20% over the year 2010.

The budget statement said that the preliminary forecasts of the GDP suggest that the national economy in the year 2011 will achieve a growth of 7% exceeding the growth rate achieved in the previous year 2010 that amounted to 6%.

Commenting on public finance in 2011, Mr Al Balushi said that "The State General Budget for the fiscal year 2011 was approved with a total expenditure amounting to OMR 8130 million and a deficit amounting to OMR 850 million and was based on the assumption of the oil price at USD 58 while the average price of the Omani oil in the year 2011 amounted to about USD 102. During the year, additional financial allocations have been approved that amounted to OMR 1.8 billion, most of which was concentrated on the current civil and security expenditures bringing the deficit of the budget to about OMR 2.6 billion."

Due to stable global oil prices, the actual budget is expected to achieve a financial surplus that may reach about OMR 1 billion, where an amount of OMR 700 million will be used as a part of the means of funding for covering the deficit of the budget of the year 2012, while the remaining surplus, if any, in light of the final closing for the accounts of the fiscal year will be used to strengthen the financial reserves of the state.

According to the minister, the inflation indicators remained at the level of 4% in spite of higher general expenditure during the year and the impacts of the imported inflation. It is considered within the targeted limits for the period.

(Sourced from www.omanobserver.om)