BMI View: We have revised down our construction industry growth forecast for Oman in 2015 from 5.5%to 4.5% in light of falling oil prices and its impact on Oman's economy. This reflects our view that weakercrude prices will have a moderate impact on infrastructure investment in Oman, given its centrality to thegovernment's objectives. Should oil prices remain low over a sustained period of time, we would consider afurther downward revision to our medium-to-long term forecasts.
Key Trends And Developments
We forecast gross fixed capital formation (GFCF) to average 6.2% in the next 5 years by comparison tothe 7% in the last 5 years. This difference reflects our more moderate construction industry growthforecast in the short term, on the back of falling oil prices.
In addition to government's USD78bn five-year (2011-2015) spending plan, the government announcedin October 2013 that the country will spend over USD50bn in infrastructure projects in the next 15 years.
From this budget, USD20bn is earmarked for the transport sector - including Oman National Railway -which is where we see the strongest pipeline of projects.