Oman’s nominal GDP jumps 30% in Q4 2022

BUSINESS REPORTER

MUSCAT, MAY 13

The nominal GDP, as per the preliminary data released by National Centre for Statistics and Information (NCSI), showed an increase of 30 per cent at end of Q4 2022 over the same period of 2021. The expansion was driven by increase in output of the hydrocarbon sector by 61.6 per cent and non-hydrocarbon sector by 16.9 per cent, according to the ‘Review of Banking and Monetary Developments – March 2023’ issued by the Central Bank of Oman.

As for the real GDP, it demonstrates an increase of 4.3 per cent during the same period under discussion. Similarly, this expansion was driven by 10.2 per cent of hydrocarbon sector and 1.6 per cent of non-hydrocarbon sector.

Meanwhile, the Omani oil average price at end of March 2023 at $81.5 per barrel was higher by 3.2 per cent than that in March 2022. The average daily oil production at 1063.8 thousand barrels as of March 2023 increased by 2.6 per cent. The Sultanate of Oman's average Consumer Price Index (CPI) showed a Y-o-Y inflation of 1.8 per cent as of March 2023.

Other depository corporations (ODCs) consist of conventional and Islamic banks in Oman. Total outstanding credit extended by ODCs grew by 6.9 per cent to RO 29.9 billion at the end of March 2023, with credit to the private sector demonstrating an increase of 6.8 per cent (Y-o-Y) to reach RO 25.1 billion.

Non-financial corporations received the highest share of the total private sector credit at approximately 46.3 per cent at end-Mar 2023, followed by household sector at 44.4 per cent. The share of financial corporations was 5.6 per cent while other sectors received the remaining 3.7 per cent of total private sector credit as at end- March 2023.

Total deposits held with ODCs registered a Y-o-Y significant growth of 4.6 per cent to reach RO 27.1 billion at the end of March 2023. Total private sector deposits increased by 1.4 per cent to RO 17.7 billion. In terms of sector-wise composition of private sector deposits, the biggest contribution is from household deposits at 52.1 per cent, followed by non-financial corporations at 28.7 per cent, financial corporations at 16.4 per cent and other sectors at 2.8 per cent.

The combined balance sheet of conventional banks showed a Y-o-Y growth of 5.6 per cent in total outstanding credit as of end-March 2023. Credit to the private sector increased by 4.8 per cent to reach RO 19.9 billion while their overall investments in securities witnessed a decline by 14.6 per cent to RO 4.5 billion at end- March 2023.

Investment in Government Development Bonds marginally increase by 2.7 per cent to RO 2.2 billion, while foreign securities increased by 23.7 per cent to RO 0.9 billion, at the end of March 2023. On the liabilities side, aggregate deposits held with the conventional banks increased by 3.4 per cent Y-o-Y to RO 22.2 billion at end-March 2023. Government deposits with conventional banks witnessed an increase of 9.4 per cent at RO 5.3 billion, and deposits of public enterprises increased by 24.8 per cent to RO 1.8 billion. On the other hand, private sector deposits, which accounted for 65.9 per cent of total deposits with conventional banks, decreased by 0.2 per cent as of March 2023 to reach RO 14.6 billion.

The total assets of Islamic Banks and Windows increased by 10.0 per cent on a Y-o-Y basis to RO 6.6 billion and constituted about 16.4 per cent of the banking system's assets at end-March 2023. Islamic banking entities provided financing of RO 5.6 billion at the end of March 2023, recording a growth of 13.4 per cent over that a year ago. Total deposits held with Islamic banks and windows increased by 10.3 per cent to RO 4.9 billion.

Among the indicators of monetary aggregates, broad money supply M2 at end-March 2023 increased slightly by 2.4 per cent to reach RO 21.0 billion. The narrow money (M1) increased slightly by 0.3 per cent, the increase in M2 is attributed to the 3.3 per cent increase in quasi-money (Rial Omani saving and time deposits, certificates of deposit issued by banks, margin deposits and foreign currency denominated deposits). Looking at components of narrow money (M1) during the same period, currency with the public fell by 5.2 per cent, while demand deposit in Rial Omani increased by 1.9 per cent.

The weighted average interest rate on RO deposits with conventional banks witnessed an increase from 1.923 per cent at end-March 2022 to 2.124 per cent at end-March 2023, and the weighted average lending rate decreased from 5.485 per cent to 5.381 per cent over the same period.

Meanwhile, the overnight Rial Omani domestic inter-bank lending rate rose to 5.073 per cent in March 2023 from 4.409 per cent a year ago. This is an outcome of the increase in the average Repo rate for liquidity injection by the CBO to 5.323 per cent from 0.500 per cent a year ago, moving with US Federal Reserve.