MUSCAT : As per a statement from the Central Bank of Oman, this growth was driven by a 5 percent rise in the non-hydrocarbon sector, although overall economic performance was impacted by a 1.4 percent contraction in the hydrocarbon sector. Real GDP also demonstrated a modest increase of 1.9 percent, supported by a 4.2 percent expansion in non-hydrocarbon activities.

As of August 2024, the average price of Omani oil stood at $82.50 per barrel, reflecting a 3.4 percent increase from August 2023. However, average daily oil production saw a decrease of 5.5 percent, reaching 994,500 barrels.

The Sultanate’s average Consumer Price Index (CPI) showed a Y-o-Y inflation of 0.6 percent as of August 2024.

In terms of banking, total outstanding credit extended by other depository corporations (ODCs) – consisting of conventional and Islamic banks in Oman – grew by 3.3 percent to RO 31.4 billion, with credit to the private sector rising 2.8 percent (Y-o-Y) to reach RO 26.3 billion.

Non-financial corporations received the highest share of the total private sector credit at approximately 44.9 percent at end-August 2024, followed by household sector at 45.2 percent. The share of financial corporations was 6.4 percent, while other sectors received the remaining 3.5 percent of total private sector credit as at end-August 2024.

Total deposits held with ODCs registered a Y-o-Y significant growth of 11.6 percent to reach RO 31.1 billion at the end of August 2024. Total private sector deposits increased by 11.7 percent to RO 20.8 billion.

In terms of sector-wise composition of private sector deposits, the biggest contribution was from household deposits at 49.5 percent, followed by non-financial corporations at 30 percent, financial corporations at 17.9 percent and other sectors at 2.6 percent.

The combined balance sheet of conventional banks showed a Y-o-Y growth of 1.7 percent in total outstanding credit as of end-August 2024. Credit to the private sector increased by 0.8 percent to reach RO 20.4 billion while their overall investments in securities increased by 41.6 percent to RO 6.0 billion at end-August 2024.

Investment in Government Development Bonds decreased by 1.0 percent to RO 1.9 billion, while foreign securities increased dramatically by 139.4 percent to RO 2.5 billion, at the end of August 2024.

On the liabilities side, aggregate deposits held with the conventional banks increased by 10.1 percent Y-o-Y to RO 24.7 billion at end-August 2024. Government deposits with conventional banks increased by 2.1 percent at RO 5.4 billion, and deposits of public enterprises increased by 28.5 percent to RO 1.9 billion.

On the other hand, private sector deposits, which accounted for 66.5 percent of total deposits with conventional banks, increased by 7.6 percent as of August 2024 to reach RO 16.4 billion.

The total assets of Islamic banks and windows increased by 10.8 percent on a Y-o-Y basis to RO 7.9 billion and constituted about 18.4 percent of the banking system’s assets at end-August 2024. Islamic banking entities provided financing of RO 6.4 billion at the end of August 2024, recording a growth of 9.7 percent over that a year ago. Total deposits held with Islamic banks and windows increased by 17.6 percent to RO 6.4 billion.

Among the indicators of monetary aggregates, broad money supply M2 at end-August 2024 increased by 12.4 percent to reach RO 24.4 billion. This is attributed to the increased in narrow money (M1) by 23.9 percent, along with 8.3 percent 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 3.6 percent, while demand deposit increased by 31.7 percent.

The weighted average interest rate on OMR deposits with conventional banks witnessed an increase from 2.409 percent at end-August 2023 to 2.704 percent at end-August 2024, and the weighted average lending rate increased from 5.444 percent to 5.603 percent over the same period.

Meanwhile, the overnight Rial Omani domestic inter-bank lending rate declined to 5.159 percent in August 2024 from 5.721 percent a year ago. This is an outcome of the average repo rate for liquidity injection by the CBO being fixed at 6.000 percent since August 2023, in line with the U.S. Federal Reserve.

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