The annual average inflation in the Sultanate was 1.6 per cent last year. However, the economic activity in the Sultanate improved in 2017 after having contracted in the previous two consecutive years mainly due to the recovery in crude oil prices. The average price of Omani Crude during 2017 stood at $51.30 per barrel as against $40.10 per barrel in the previous year.

The recovery in the economy seen between January and September 2017 has been fairly broad-based with the oil sector growing at 23.9 per cent and the non-oil sector registering a growth of 4.9 per cent with overall gross domestic product (GDP) growth at 10.1 per cent.

Policy measures aimed at rationalising expenditure and increasing revenue helped in fiscal consolidation last year. The financial health of banks in terms of asset quality, provision coverage and capital adequacy remained strong.

The banking sector in the Sultanate continued to witness reasonable growth and supported the economic diversification initiatives including credit for the small and medium enterprises (SMEs).

Total deposits registered a growth of 5.6 per cent to OMR21.6 billion, with private sector deposits growing by 5.2 per cent to OMR14 billion at the end of December 2017.

Sector-wise, the contribution of households in total private sector deposits was 48.2 per cent, followed by non-financial corporations at 29.9 per cent, financial corporations at 19.1 per cent, and other sectors at 2.8 per cent.

Review of the activities of conventional banks indicates an annual growth in total outstanding credit disbursement of 4.1 per cent at the end of December 2017. Credit to the private sector increased by 3.8 per cent to OMR18.20 billion.

Conventional banks’ overall investments in securities grew by 19.1 per cent to OMR2.9 billion. Investment in Government Treasury Bills stood at OMR454.9 million at the end of December 2017. Investment in Government securities include government development bonds, government sukuk, and others increased by 2.3 per cent over the year to OMR1.34 billion.

Aggregate deposits held with conventional banks increased by 1.9 per cent to OMR18.60 billion in December 2017 from OMR18.30 billion a year ago. Government deposits with conventional banks marginally rose by 0.8 per cent to OMR4.90 billion while deposits of public enterprises decreased by 2.6 per cent to OMR0.90 billion during the same period.

Private sector deposits, which accounted for 67.3 per cent of total deposits with conventional banks, increased by 2.6 per cent to OMR12.50 billion in December 2017 from OMR12.20 billion a year ago.

The core capital reserves and undistributed profits of conventional banks at the end of December 2017 stood at OMR4.60 billion.