MUSCAT: Reflecting the persistent low crude oil prices in the global markets, economic activities in the Sultanate of Oman have registered a slowdown with an overall contraction in nominal GDP (gross domestic product) by 14.2 per cent during the January to September 2015 period, mainly due to a sizeable drop of 38.5 per cent in the petroleum sector’s GDP.
However, the non-oil sector witnessed a growth of 4.7 per cent during the period, notably from the services sector activities. The decline in oil prices has also pushed the Sultanate’s fiscal and external account balance to a deficit in 2015. Reforms in place limiting current spending and increased non-hydrocarbon revenue would help ease fiscal deficits.
Despite the easy monetary conditions, inflation has remained very low, with the annual average CPI (consumer product index) for the Sultanate pegged at 0.26 per cent during the January-February 2016 period, compared with the same period in the previous year. The banking system is well capitalised and is resilient to the drop in oil prices supported by a relatively comfortable liquidity situation.
The total assets of conventional commercial banks increased by 10 per cent to OMR28.4 billion in February 2016 from OMR25.8 billion a year ago. Of the total assets, credit disbursement accounted for 65.9 per cent and increased by 9.1 per cent as of the end of February 2016 to OMR18.7 billion. Credit extended to the private sector increased by 11.5 per cent to reach OMR16.5 billion at the end of February 2016.
