Improved labour productivity is imperative for Oman’s economic diversification

This study measures sectoral labour productivity in Oman. Our findings indicate low as well as declining labour productivity across most sectors. Only Financial Intermediation shows some increases in labour productivity. We note that growth in most sectors was largely driven by fiscal spending rather than growth in labour productivity. The findings suggest that improving labour productivity and diversifying the economy can be both achieved by directing future expansions towards high-end industries, which can absorb the highly skilled and highly motivated workforce of Omanis.