With a record budget spending in 2011, the government is pursuing its investment focus on infrastructure projects. At 4.4 per cent, the estimated Omani GDP growth is higher than that of many developed and emerging economies.
The high GDP growth comes in the backdrop of a very low rate of forecasted inflation, which is conducive for banking sector growth. The government has envisaged a planned spending of RO4.28bn for various infrastructure projects in 2011-15.
As high government spending continues, the government sector would remain the principal source of credit demand over the short-term. The government spending is expected to trickle down to the private sector from early 2012.
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