Dubai: Oman’s economy is expected to continue to grow steadily during the second half of the year despite the Eurozone crisis, supported by the favourable oil prices, the country’s central bank governor said.

“The outlook for 2012 remains positive as [is] evident by some lead indicators like credit growth, money supply etc. The momentum of growth is likely to be sustained in the second half of 2012 despite adverse global developments,” Hamoud Bin Sangoor Al Zadjali told Zawya Dow Jones in an email interview on Monday.

In December, Al Zadjali told Zawya Dow Jones he expects gross domestic product to range between 5 per cent and 6 per cent through the year.

Ali Al Raisi, vice-president of the central bank, confirmed that assessment on Tuesday: “We still expect the real GDP to be between 5-6 per cent for 2012.”

Al Zadjali said the economic growth was “driven primarily by favourable crude oil prices in the international markets”. The price of Oman crude futures for August delivery was $95.46 a barrel on Tuesday on the Dubai Mercantile Exchange.

While Oman isn’t massively endowed with crude oil reserves as some of its Arabian Gulf neighbours, in March its crude oil production averaged 903,000 barrels a day. Although, according to the International Energy Agency, the sultanate is facing declining oil production as a result of field maturity, Oman has said it is targeting an average of 920,000 barrels a day through the year.

IMF review

According to the International Monetary Fund’s March review of Oman, its economy was unaffected by the recent turmoil in international financial markets and the fund maintained a positive medium-term outlook for Oman’s economic growth.

“Omani banks are well-capitalised and have little exposure to the Eurozone. This combined with an export structure that is dominated by oil and oriented primarily towards fast-growing economies in Asia has limited the impact of the European debt crisis,” the IMF had said.

However, despite the positive economic outlook, political risks and scope for fiscal reform pushed rating agency Standard & Poors to keep a negative outlook for the sultanate with a potential downgrade in the future.

Despite IMF warning Oman to be ready to apply macro-prudential measures if credit growth starts to feed into higher inflation, Al Zadjali was confident that the country’s average annual inflation rate which stood at 3.5 per cent in March, will remain “under 5 per cent in 2012... given the benign global price situation”.

The central bank routinely issues monthly certificates of deposits to absorb excess liquidity in the market, but has repeatedly said it “will not be interfering” to control inflation levels.