Oman economy drops by 9 per cent in first nine months of 2016

Muscat: Low level of oil prices during the past couple of years brought to the fore several challenges to the Omani economy, impacting overall economic activity.
According to the bulletin published by the Central Bank of Oman (CBO), preliminary national accounts data for Oman indicated that the nominal GDP declined by 9 per cent during the first nine months of 2016, compared to the same period last year.
The decline was reflected primarily in the petroleum sector with a fall of 29.4 per cent and a marginal drop of 0.2 per cent in the non-petroleum sector.
While manufacturing and wholesale and retail trade were adversely affected, value addition showed positive growth, mainly in construction, agriculture and fishing, as well as in real estate services. Average annual inflation for the year remained moderate at 1.1 per cent. The fiscal gap widened during the year and the government took several measures to augment non-oil revenues and rationalised government spending, apart from stepping up external borrowings, given that the current level of debt to GDP ratio remains relatively low.
With the current account in the balance of payments also facing pressure, the CBO ensured that the foreign exchange reserves in its balance sheet remained intact.
The banking sector remained resilient, supporting the economic diversification initiatives and credit needs. The combined balance sheet of conventional and Islamic banks (other depository corporations) taken together, provides a complete overview of the financial intermediation taking place in the banking system in Oman.
The total outstanding credit extended by other depository corporations stood at OMR22.1 billion as of 2016-end, a rise of 10.1 per cent over the level witnessed a year ago. Credit to the private sector increased by 10.1 per cent to OMR19.7 billion as of 2016-end.
Of the total credit to the private sector, the household sector (mainly personal loans) stood at 46.5 per cent, closely followed by the non-financial corporate sector at 45.2 per cent, with financial corporations accounting for 5.1 per cent and other sectors the remaining 3.2 per cent.
Total deposits registered a growth of 5.2 per cent to OMR20.4 billion by 2016-end. Private sector deposits of the banking system registered a growth of 4.9 per cent to OMR13.3 billion by 2016-end.
Sector-wise, the share of households was 48.6 per cent of the total private sector deposit base, followed by non-financial corporations at 28.5 per cent, financial corporations at 19.8 per cent and the other sectors at 3.1 per cent.