Economic activity in the Sultanate improved last year after having contracted in the previous two consecutive years mainly due to the recovery of crude oil prices. The average price of Omani crude in 2017 stood at $51.3 per barrel as against $40.1 per barrel during the previous year.
The recovery in growth seen during the period January to September 2017 has been fairly broad based with the hydrocarbon sector growing at 23.9 per cent and the non-hydrocarbon sector registering a growth of 4.9 per cent with overall GDP growth at 10.1 per cent.
Inflationary conditions in the Sultanate generally remained benign with some upward movement on account of increase in energy prices and user fees. Average annual inflation based on CPI during January till December 2017 stood at 1.6 per cent.
Policy measures aimed at rationalising expenditure and increasing revenue helped in fiscal consolidation during the year. The financial health of banks in terms of asset quality, provision coverage and capital adequacy remained strong.
The banking sector continued to witness reasonable growth and supported economic diversification initiatives including credit outlays to the SME sector.
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 the Sultanate.
The total outstanding credit extended by other depository corporations stood at RO 23.6 billion as at the end of December 2017, a growth of 6.4 per cent over the level witnessed a year ago.
Credit to the private sector increased by 6.5 per cent to RO 21 billion as at the end of December 2017.
Of the total credit to the private sector, the household sector (mainly personal loans) stood at 46.1 per cent closely followed by the non-financial corporate sector at 45.7 per cent while financial corporations and other sectors obtained 4.9 per cent and 3.3 per cent, respectively.
Total deposits registered a growth of 5.6 per cent at RO 21.6 billion, with private sector deposits growing by 5.2 per cent to RO 14 billion as 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 the 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 as at the end of December 2017. Credit to the private sector increased by 3.8 per cent to RO 18.2 billion.
Conventional banks’ overall investments in securities grew by 19.1 per cent to RO 2.9 billion. Investment in Government Treasury Bills stood at RO 454.9 million at the end of December 2017.
Investment in government securities inclusive of GDBs, government sukuk, and others increased by 2.3 per cent over the year to RO 1.34 billion. — ONA
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