GDP declines by 5.1pc in 2016: CBO bulletin

MUSCAT: With oil prices continuing to remain low, economic activity in the Sultanate remained subdued. Preliminary national accounts data for Oman indicate that the nominal GDP declined by 5.1 per cent during 2016 compared to last year, according to the bulletin published the Central Bank of Oman (CBO).GDP declines by 5.1pc in 2016: CBO bulletin

The decline was reflected in the petroleum sector with a fall of 23.7 per cent and in a marginal increase of 0.6 per cent in the non- petroleum sector.

While manufacturing and wholesale and retail trade were adversely affected, value addition showed positive growth mainly in construction, agriculture and fishing as well as in real estate services.

Average annual inflation based on CPI for the Sultanate during January-March 2017 stood at 2.33 per cent mainly due to revision in energy prices, transport costs, education and other user fees.

The sharp drop in fiscal revenue outstripping the reduction in fiscal expenditure during 2016 led to the widening of the fiscal deficit.

The funding gap has been met mostly by external borrowings by the Sovereign.

With the current account in the balance of payments also facing pressure, the CBO ensured that the gross foreign exchange reserves in its balance sheet remained healthy.

The financial position of the banks in Oman in terms of asset quality, provision coverage, capital adequacy and profitability remained sound.

The gross non-performing loans as a proportion of total loans and advances stood at 2.1 per cent at the end of December 2016.

The BIS capital adequacy ratio averaged 16.8 per cent at the end of 2016 compared to 16.1 per cent recorded in the previous year.

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 Oman.

The total outstanding credit extended by other depository corporations stood at RO 22.4 billion as at the end of March 2017, a rise of 6.5 per cent over the level witnessed a year ago.

Credit to the private sector increased by 8.5 per cent to RO 20.2 billion as at the end of March 2017.

Of the total credit to the private sector, the household sector (mainly under personal loans) stood at 46.1 per cent closely followed by the non-financial corporate sector at 45.6 per cent, financial corporations at 5.2 per cent and other sectors the remaining 3.1 per cent.

Total deposits registered a growth of 7.5 per cent to RO 21.4 billion as at the end of March 2017.

Private sector deposits of the banking system registered a growth of 6.6 per cent to RO 13.8 billion as at the end of March 2017.

Sector-wise, the share of households was 48.7 per cent of the total private sector deposit base, followed by non-financial corporations at 29.9 per cent, financial corporations at 18.5 per cent and the other sectors at 2.9 per cent.

Review of the activities of conventional banks denotes an annual growth in total outstanding credit of 3.5 per cent as at the end of March 2017.

Credit to the private sector increased by 6.3 per cent to reach RO 17.8 billion as at the end of March 2017.

Conventional banks’ overall investments in securities stood at RO 3.1 billion as at the end of March 2017. — ONA