Oman’s nominal gross domestic product (GDP) fell 14.2 per cent during the first half of 2015, compared to the same period last year, due to lower crude oil prices in global markets and subdued global growth, according to the monthly report issued by the Central Bank of Oman (CBO).
The petroleum sector (in GDP) declined substantially, by 38.2 percent, while the non-oil sector witnessed a modest growth of 3.7 percent. Oman’s fiscal balance also shifted from surplus to deficit during the period, in the wake of the significant drop in crude oil prices.
Also, inflation continued its downward trend, with the average consumer price index (CPI) for the Sultanate at a mere 0.08 percent during January-November 2015, over the corresponding period in 2014.
Further, the current account balance also recorded a deficit during the first two quarters of 2015. However, the growth of monetary aggregates in the Sultanate continued its rising pattern, despite the decline in crude oil prices, which commenced in the second half of 2014.
The CBO report also pointed out that the total assets of conventional commercial banks increased by 15.1 percent to RO28.5 billion in November 2015, from RO24.7 billion a year ago. Of these total assets, credit disbursements accounted for 64.6 percent and increased by 9.3 percent at the end of November 2015 to RO18.4 billion. Credit to the private sector increased by 10.3 percent to reach RO16.2 billion at the end of November 2015.
Of the total credit issued to the private sector as of the end of November 2015, the share of the non-financial corporate sector stood at 46.8 percent, closely followed by the household sector (mainly under personal loans) at 45.3 percent, financial corporations at 5.4 percent and other sectors making up the remaining 2.5 percent.
The CBO report also added that commercial banks’ overall investments in securities increased by 3.4 percent to RO2.9 billion, at the end of November 2015, from RO2.8 billion a year ago.
Further, investment in Government Development Bonds increased 79 percent over the year to RO831.5 million at the end of November 2015. Banks also invested RO425.3 million in Government Treasury Bills by the end of November 2015. Commercial bank investments in foreign securities stood at RO776.4 million in November 2015, registering an increase of 10.2 percent over the year.
The CBO report also pointed out that aggregate deposits held with conventional banks registered an increase of 3.9 percent to RO18 billion in November 2015, from RO17.3 billion a year ago. Government deposits with conventional banks increased by 0.8 percent to RO5.1 billion.