MUSCAT: The Sultanate’s economy has witnessed more improvement in the first half of this year, thanks to increase in the crude oil price coupled with the efforts made to enhance economic diversification. The Sultanate’s GDP at the current prices rose 12.3 per cent in the first half of 2017 as against a 11.1 per cent decline in the same period of 2016, according to a report from the Central Bank of Oman citing National Accounts data. The growth is driven by good performance in various economic sectors. The oil and non-oil activities grew by 34.9 per cent and 3.8 per cent respectively.
Despite the improvement in macro-economics, economic challenges remain. The dual deficit in the State budget and the current account has forced the government to take a number of measures, including controlling and rationalising expenditure, reducing fuel/ power subsidy, increasing government service fees and income tax revenues, etc. On the other hand, CBO has continued to adopt appropriate monetary policies and controlling liquidity conditions to ensure availability of enough credit to meet the needs of productive sectors.
As for the developments in terms of prices, figures indicate the average inflation rate, as per the consumer price index, increased to 1.7 per cent in the first nine months of this year. The increase has been attributed mainly to the increase in education, transport, furniture, accessories, domestic equipment, regular maintenance for homes, tobacco and energy. In view of increase in average price of Omani crude oil in the first nine months of this year, the financial status of the State has witnessed many positive signs. The average price of Omani crude oil between January and September stood at $50.6.
In terms of credit and deposits, the banking sector continued its growth at a reasonable rate despite the general sluggishness in economic activity.
The value of credit availed of by banking sector stood at RO 23 billion by the end of September 2017. The sectoral distribution of the total credit availed by the private sector shows the retail sector (mostly personal loans) constituted 46.3 per cent of the loans, followed by non-financial corporate (45.5 per cent), financial companies (5.1 per cent) and other sectors (3.1 per cent).
The value of the total deposits in the banking sector grew 5.8 per cent to touch RO 21.6 billion. The private sector deposits increased 5.6 per cent to touch RO 13.8 million by the end of September 2017. The sectoral distribution of total deposits of the private sector show that individuals contributed 48.6 per cent, financial corporates 28 per cent, non-financial corporates 20 per cent and other sectors 2.7 per cent. — ONA