Non-Opec member Oman saw its nominal GDP shrink 14.1% to OMR27bn in 2015 amid contracting hydrocarbons value-added economic contribution that largely mitigated a mild, but well insufficient, increase of non-oil output, preliminary data from the statistics office (NCSI) showed. NCSI does not release inflation-adjusted GDP data on a regular basis.

The hydrocarbons sector, which had long been the backbone of Oman’s economic growth and main source of budget proceeds, fell 38.2% y/y to OMR9.165bn last year, accounting for just 34% of the total GDP, well down from a 47% contribution in 2014.

Crude oil output fell 42% y/y in 2015 to a nominal OMR7.938bn whereas that of natural gas rose 16% y/y to a nominal OMR1.226bn.

The non-hydrocarbons sector grew a mild 2.3% y/y to OMR19.372bn last year. The higher share of the non-hydrocarbons economy is good news for the government seeking to diversify the national economy. The services sector topped the list at OMR13.22bn (68% of the non-oil GDP), marking a 3.1% annual growth in 2015. The construction sector accounted for 8% of Oman’s nominal GDP last year on strong local and tourism demand.

The manufacturing sector edged up a marginal 0.4% y/y to a nominal OMR5.728bn last year, equalling to 21% of the overall GDP.

The IMF forecasts a medium-term real growth rate of 3.6% for Oman during 2014-18.  Such growth, however, will rely on ongoing efforts to diversify the economy away from oil. The government continues to focus on infrastructure investment, and on fostering non-oil sectors such as logistics, fishing industries and tourism.