Oman’s nominal GDP down 14.2%

Muscat: Reflecting the persistent low crude oil prices in the global markets, economic activities in the Sultanate of Oman have registered a slowdown with an overall contraction in nominal GDP (gross domestic product) by 14.2 per cent during the January to September 2015 period, mainly due to a sizeable drop of 38.5 per cent in the petroleum sector’s GDP.
However, the non-oil sector witnessed a growth of 4.7 per cent during the period, notably from the services sector activities. The decline in oil prices has also pushed the Sultanate's fiscal and external account balance to a deficit in 2015. Reforms in place limiting current spending and increased non-hydrocarbon revenue would help ease fiscal deficits.
Despite the easy monetary conditions, inflation has remained very low, with the annual average CPI (consumer product index) for the Sultanate pegged at 0.26 per cent during the January-February 2016 period, compared with the same period in the previous year. The banking system is well capitalised and is resilient to the drop in oil prices supported by a relatively comfortable liquidity situation.
The total assets of conventional commercial banks increased by 10 per cent to OMR28.4 billion in February 2016 from OMR25.8 billion a year ago. Of the total assets, credit disbursement accounted for 65.9 per cent and increased by 9.1 per cent as of the end of February 2016 to OMR18.7 billion.
Credit extended to the private sector increased by 11.5 per cent to reach OMR16.5 billion at the end of February 2016.
Conventional banks’ overall investments in securities stood at OMR2.9 billion at the end of February 2016. Investment in Government Development Bonds rose by 29 per cent over the year to OMR863.9 million at the end of February 2016. Banks also invested OMR395.5 million in the government.
Commercial banks’ investments in foreign securities stood at OMR829.2 million in February 2016, reflecting an increase of 36.9 per cent over the year. Aggregate deposits held with conventional banks registered a modest increase of 1.4 per cent to OMR17.8 billion in February 2016 from OMR17.6 billion a year ago.
Government deposits with conventional banks marginally declined by 6.9 per cent to OMR4.6 billion. Deposits of public enterprises increased by 4.8 per cent to OMR1 billion during the same period.
Private sector deposits, which constituted 67 per cent of the total deposits with conventional banks, increased by 4.6 per cent to OMR11.9 billion in February 2016 from OMR11.4 billion a year ago.
The core capital and reserves of conventional banks stood at OMR3.8 billion as of the end of the February 2016, registering a rise by 15.6 per cent over the previous year.