GDP grows by 12.3pc

MUSCAT: The partial recovery in crude oil prices and the drive towards economic diversification led to an upturn in the economy with the nominal GDP growing by 12.3 per cent in the first half of 2017 as against a contraction of 11.1 per cent in the first half of 2016.

The average annual inflation based on CPI for the Sultanate during January—November 2017 stood at 1.6 per cent.

The Sultanate’s fiscal position registered signs of improvement with the rise in average crude oil price.

The average price of Omani crude oil during January to October stood at $50.6.

Meanwhile, banking in Oman continued to be the predominant player in the financial sector with a major part of financial intermediation contributed by this sector.

The financial health of banks in terms of asset quality, provision coverage and capital adequacy remained strong.

The sector continued to witness reasonable growth in both credit and deposits.

The combined balance sheet of conventional and Islamic banks (other depository corporations) provides a complete overview of financial intermediation taking place in the country’s banking system.

The total outstanding credit extended by other depository corporations stood at RO 23.5 billion as at the end of November 2017, representing a 7.3 per cent growth over the level witnessed a year ago.

Credit to the private sector increased by 6.5 per cent to RO 20.9 billion as at the end of November 2017.

Of the total credit to the private sector, the household sector (mainly under personal loans) stood at 46.2 per cent closely followed by the nonfinancial corporate sector at 45.6 per cent.

Financial corporations and other sectors obtained 4.9 per cent and 3.3 per cent respectively.

Total deposits registered a growth of 6 per cent to RO 21.5 billion, with private sector deposits growing by 6.7 per cent to RO 14 billion as at the end of November 2017.

Sector-wise, the contribution of households in total private sector deposits was 48.3 per cent, followed by non-financial corporations at 29.4 per cent, financial corporations at 19.4 per cent, and the other sectors at 2.9 per cent.

A review of the activities of conventional banks indicates an annual growth in total outstanding credit of 4.9 per cent as at the end of November 2017.

Credit to the private sector increased by 3.7 per cent to RO 18.2 billion.

The conventional banks’ overall investments in securities grew by 13.6 per cent to RO 3 billion.

Investment in Government Treasury Bills stood at RO 515.2 million at the end of November 2017.

Investment in government securities, including GDBs, government sukuk, and others marginally increased by 0.5 per cent over the year to RO 1.3 billion.

Aggregate deposits held with conventional banks increased by 2.4 per cent to RO 18.6 billion in November 2017 from RO 18.2 billion a year ago.

Government deposits with conventional banks marginally rose by 0.5 per cent to RO 4.9 billion while deposits of public enterprises decreased by 10.7 per cent to RO 900 million during the same period.

Private sector deposits, which accounted for 67.3 per cent of the total deposits with conventional banks, increased by 4.1 per cent to RO 12.5 billion in November 2017 from RO 12.1 billion a year ago.

The core capital and reserves of conventional banks as at the end of November 2017 stood at RO 4.2 billion.