Oman is feeling the effect of lower oil prices, which is causing the flow of investable funds to decrease not only in essential areas such as health and education, but also in target growth sectors such as tourism and logistics.
Private sector funding of hotels and leisure is a relatively strong market. The oil and gas sectors are continuing construction work on existing projects but limiting further exploration, while construction in the health and education sectors has slowed. Infrastructure has benefited from high levels of investment in recent years and is now experiencing a natural slow-down.
Given Oman’s high dependence on oil revenues to drive investment, 2017 will be very challenging. The budget is releasing money for existing projects, but not for new. Large-scale master plans such as Irfan, Yiti, Yinket and Mina Sultant Qaboos are likely to continue through the design stages but there are some doubts as to when they may go to market.
Duqham in the south is proceeding with its refinery project and this is anticipated to be a catalyst for further development of this new economic zone. But the development of Duqham has been significantly slower than originally reported.