His Majesty Sultan Haitham bin Tariq
BOARD Of GOVERNORS
His Highness Sayyid Taimur bin Asa’ad bin Tariq Al Said
Chairman
H.E. Dr. Said bin Mohammed
Al-Saqri
Deputy Chairman
Maqbool bin Ali bin Sultan
Al-Lawatia
Member
H.E. Abdullah bin Salim
Al-Harthy
Member
Shaikh Mohammed
bin Saud bin Salim
Bahwan Al Mukhaini
Member
H.E. Abdullah bin
Salim Al Salmi
Member
Ahmed bin
Mohammed bin
Abdullah Al-Abri
Member
FOREWARD
The Omani economy registered positive growth in 2023 despite heightened global economic
uncertainty. Under the wise leadership of His Majesty Sultan Haitham bin Tarik, the Government
continued to implement decisive fiscal policies and structural reforms that foster inclusive and
sustainable economic growth. Likewise, the Central Bank of Oman (CBO) remained steadfast
in its mandates, focusing on maintaining monetary stability, safeguarding financial stability, and
supporting economic activity in the country.
The 2023 Annual Report provides a comprehensive analysis of macroeconomic developments in
the Sultanate of Oman, including the real sector, public finance, external sector, and financial
sector in 2023, along with a near-term outlook.
The Omani economy moderated in 2023 from its high in the previous year. Real GDP expanded by
1.3 percent in 2023, driven by better performance in the non-hydrocarbon sector. The hydrocarbon
sector however increased only slightly by 0.4 percent in 2023 owing to agreed production cuts
under OPEC+. Inflationary conditions continued to remain low during the year. The average
consumer price inflation in Oman was 0.9 percent in 2023, reflecting a slowdown in the rate from
the 2.5 percent observed in 2022. The exchange rate peg continues to provide a credible nominal
anchor for Oman, reducing uncertainty and contributing to maintaining low and stable inflation
domestically. In 2023, both the current account and fiscal balance remained in comfortable
surpluses, buoyed by favorable oil prices and the government’s commitment to fiscal discipline and
a sustained reform momentum under Oman Vision 2040. These effective measures, along with the
government’s sound debt management strategy, enabled a reduction in the public debt-to-GDP
ratio to 36.0 percent in 2023, down from 40.2 percent in 2022.
The CBO continued to pursue policies and implement measures that support economic growth.
Adequate liquidity was ensured in the banking system so that credit availability remains supportive
of productive activities. The banking sector remained stable and sound with licensed banks
consistently maintaining robust capital positions with capital adequacy ratio of 18.9 percent at the
end of 2023. This not only underscores their stability but also illustrates their capacity to withstand
economic and financial shocks. Importantly, strong capital and liquidity buffers have remained
critical to preserve banks’ resilience, as well as public and investor confidence.
The CBO remains committed to fostering a conducive environment for innovation in the financial
sector. Close monitoring of developments within the FinTech ecosystem has been prioritized, with
necessary steps taken to promote vibrant, inclusive, safe, and efficient digital financial products
and services. The use of digital platforms has steadily increased over the years, becoming a key
driver of financial inclusion in Oman. Notably, the launch of the new advanced national Real-Time
Gross Settlement System marks a significant step towards the digitalization of Oman’s payment
infrastructure.
The CBO continued to enhance the cyber environment for licensed institutions in Oman to promote
the delivery of safe digital financial services. During the year, the CBO issued a regulatory framework
for cybersecurity and resilience to address cyber risks and to continuously monitor and protect
licensed institutions from cybersecurity threats.
Last but foremost, I would like to express our deep appreciation to all CBO staff members for their
commitment and high-quality output. I also sincerely acknowledge the steadfast support that CBO
receives from the government authorities, banking sector, non-banking financial institutions, and
other institutions to efficiently discharge its various responsibilities. I am also thankful to the Board of
Governors of the CBO for their unwavering support and guidance. Looking ahead, I am confident
that the CBO will continue to remain committed to policies and initiatives that underpin financial
stability and promote sustainable economic growth and development.
Tahir Salim Abdullah Al Amri
Executive President
CONTENTS
CHAPTER
CURRENT ASSESSMEMT AND
MACROECONOMIC OUTLOOK
P10
CHAPTER
PUBLIC FINANCE
P48
P60
CHAPTER
OUTPUT, EMPLOYMENT
AND PRICES
P20
CHAPTER
MONEY, BANKING, AND
FINANCIAL INSTITUTIONS
CHAPTER
EXTERNAL SECTOR
DEVELOPMENTS
CHAPTER
CENTRAL BANK ACCOUNTS
STATISTICAL APPENDIX
P116
P122
P124
P60
P92
Macroeconomic Indicators at a Glance 2023
Broad Money (M2) Growth
Total Credit Growth
13.1%
4.3%
Narrow Money Supply
(M1) Growth
6.7%
Money &
Banking
Total deposits Growth
12.3%
Weighted Avg OMR
Lending Rate
5.514%
Weighted Avg OMR
Deposit Rate
2.636%
CBO's Gross Foreign Assets
-0.6%
Current
Account Surplus
2.4% of GDP
Net Import Cover of the
Foreign Exchange Reserves
4.1 months
External
Sector
Developments
NEER Growth
1.3%
Non-Oil Export Growth
1.1%
Workers Remittances increase
4.0%
ANNUAL REPORT 2023
Macroeconomic Indicators at a Glance 2023
Hydrocarbon Real GDP Growth
0.4%
Non-Hydrocarbon Real
GDP Growth
2.4%
Real GDP Growth
1.3%
Output,
Employment
and Prices
Non-Hydrocarbon
Nominal GDP
Growth
1.7%
Nominal GDP
Growth
-2.8%
Hydrocarbon
Nominal GDP
Growth
-11.9%
Oil Production
Growth
-1.5%
Oil Price (BBL/USD)
Growth
-13.7%
Total Revenues
Growth
-13.3%
Public
Finance
Total Expenditures
Growth
-12.9%
Debt to GDP Ratio
Growth
36.5%
Fiscal Balance
OMR 936 mn
ANNUAL REPORT 2023
CHAPTER
CURRENT ASSESSMENT
AND MACROECONOMIC
OUTLOOK
ANNUAL REPORT
The
global
economic
environment
remained challenging in 2023, marked
by a series of economic events that led
to a slowdown in economic activity amid
rising interest rates. The ongoing threat of
inflationary pressures, geopolitical tensions,
disruptions in global trade, China’s property
sector crisis, and extreme climate events
were among the factors that continued to
test the resilience of the global economy.
Although some of these pressures alleviated
somewhat in 2023 — for instance, global
inflation receded from its peak in 2022, and
key commodity prices moderated — global
economic growth moderated compared
to the previous year.
The ongoing efforts of major central banks
to fight inflation was among the key
factors shaping economic conditions in
2023. Although inflation came down from
its peak for many countries, due to lower
energy prices and improvements in global
supply chain conditions, it remained at
high levels. This prompted many central
banks to maintain a tight monetary policy
stance, with some even continuing to raise
10
their policy rates. Importantly, climaterelated issues are now receiving increasing
attention, which may complicate the task
of inflation management if agricultural
commodities experience adverse shocks.
Despite a challenging global environment,
the government’s policy measures and
reforms in Oman have achieved notable
success. Economic activity continued to
expand and sustain its positive growth
trajectory, driven by the recovery of
nonhydrocarbon
sectors.
Inflationary
conditions remained low, owing to
supportive fiscal and monetary actions
adopted by the government and the
CBO. Fiscal and external balances
have been in comfortable surpluses in
2023, and public debt was significantly
reduced from last year. Moreover, the
government’s commitment to continued
fiscal consolidation measures has created
sufficient fiscal space to support economic
activity. Against this backdrop, this chapter
outlines the economic developments
during 2023 in the Sultanate of Oman and
the outlook for 2024.
CHAPTER I
Global Developments in 2023
The global economy during 2023 faced
major headwinds in the form of tightening
in financial conditions combined with
geopolitical tensions, that reversed the
post-pandemic recovery and presented
new challenges for sustaining economic
growth. Nevertheless, economic activities
showed healthy growth during the year
supported by strong demand for services,
notable progress in combating inflation,
and robust economic growth in the United
States and several major emerging market
and developing economies, namely India
and China.
The July 2024 update of IMF’s World
Economic Outlook (WEO) placed global
economic growth for 2023 at 3.3 percent
as against a growth of 3.5 percent in 2022.
Advanced economies (AEs) posted a
growth of 1.7 percent while emerging and
developing economies (EMDEs) grew by
4.4 percent in 2023. The slowdown in growth
in 2023 should be viewed in the context
of geo-economic factors, which poses a
threat to growth prospects, particularly for
emerging and developing economies.
Despite the expected global recovery,
several adverse risks to world trade growth
persist. These include new commodity price
spikes resulting from geopolitical shocks,
as well as supply chain disruptions, which
were evident in the volume of world trade
of goods and services. In 2023, this volume
CURRENT ASSESSMENT AND MACROECONOMIC OUTLOOK
decreased by 0.9 percent compared to the
growth of 5.1 percent in the previous year.
Rising trade distortions and deployment of
trade-restrictive measures are expected to
continue weighing on the level of global
trade.
Global inflation eased to 6.8 percent in 2023
from 8.7 percent in the previous year. However,
it remains elevated with divergences across
economies and related inflation rescue
measures. In advanced economies (AEs),
the inflation rate decreased to 4.6 percent
in 2023 from 7.3 percent in 2022, while the
inflation rate in emerging markets and
developing economies (EMDEs) decreased
to 8.3 percent in 2023 compared to 9.9
percent in 2022. The easing of inflationary
pressures was attributed to strong monetary
policy actions in many economies, along
with the recent decline in international food
and energy prices.
The IMF (WEO update, July 2024) also placed
oil prices at 16.4 percent lower in 2023, and
projected to increase slightly by about
0.8 percent in 2024. This increase reflects
elevated oil prices due to the extension of oil
production cuts by OPEC+, including Russia
and other non-OPEC oil producing countries.
The average price of oil (a simple average
of UK Brent, Dubai Fateh, and WTI crude oil
prices) is projected to decrease from $81.3
per barrel in 2024 to $76.4 per barrel in 2025.
11
Domestic Developments in 2023
The Omani economy registered positive
growth in 2023 despite heightened global
economic uncertainty. Decisive policy
measures and ongoing reform efforts by the
government, along with favorable oil prices,
enabled the economy to achieve stability
and growth. Both the current account and
fiscal balance remained in comfortable
surpluses in 2023, buoyed by favorable oil
prices and the government’s steadfast
adherence to fiscal discipline and sustained
reform momentum under Oman Vision 2040.
Economic activity is on a recovery trend,
with accelerated economic diversification
and minimal impact from downside risks
stemming from global factors. Notably,
improvements in sentiment and an optimistic
economic outlook have also benefited from
progress on several existing projects and
the announcement of new ones. Foreign
investments have continued to increase,
driven by diverse upcoming projects in oil
production, the petrochemical industry,
manufacturing, food security, logistics, and
tourism.
After a strong rebound from the pandemic,
economic activity in Oman moderated in
2023. Real GDP expanded by 1.3 percent
in 2023, compared with 9.6 percent in
2022. The moderation was mainly due to
OPEC+’s agreed production cuts, which
led to hydrocarbon GDP growth of only 0.4
percent during the year. Additionally, nonhydrocarbon GDP also moderated to 2.4
percent in real terms, down from the high
growth rate of 9.1 percent seen in 2022. Within
the petroleum activities, output from crude
petroleum declined by 0.1 percent, while
natural gas output increased by 3.1 percent
in 2023. Real growth in non-petroleum GDP
was largely contributed by the agriculture,
forestry and fishing with 6.9 percent, and the
service sector with 3.5 percent growth, while
12
non-petroleum industrial activities declined
by 0.4 percent during 2023.
In the services sector, expansion in
‘telecommunications
and
information
service activities’, ‘financial intermediation’,
and ‘transport and storage’, in real terms by
8.4 percent, 8.0 percent, and 4.8 percent,
respectively during 2023. This robust growth
supported the non-hydrocarbon sector.
It is worth noting that the services sector
holds great potential to generate further
momentum for economic diversification in
Oman.
In 2023, Oman experienced a notable
decline in inflation, benefiting from the
monetary policy framework, fixed exchange
rate regime and fiscal policy measures. The
average consumer price inflation in Oman
was 0.9 percent in 2023, a decrease from the
2.5 percent observed in 2022. This decline
can be primarily attributed to lower energy
prices, and subdued global and domestic
demand conditions.
Oman’s inflation trajectory is significantly
influenced by external factors, primarily
due to its integration with global markets, as
evidenced by fluctuations in oil prices and
exchange rate movements. The impact of
these factors on domestic inflation has been
contained by an ongoing appreciation in
the nominal effective exchange rate (NEER)
and an increased focus on diversification.
Additionally, government administrative
measures have also helped contain the
inflation rate. It is worth noting that Oman
has historically maintained a moderate
and stable inflation environment, which is
favorable for sustainable economic growth.
Oman’s fiscal position continued to improve,
maintaining a comfortable surplus in 2023,
driven by favorable oil and the adoption
of prudent policy measures and improved
fiscal discipline. As a result, the government
CHAPTER I
achieved a fiscal surplus of 2.2 percent of
GDP in 2023, marking significant progress
towards its planned fiscal consolidation path
with the aim of achieving fiscal balance by
2024. These effective measures, along with
the government’s sound debt management
strategy, enabled a reduction in the public
debt-to-GDP ratio to 36.0 percent in 2023, down
from 40.2 percent in 2022. Due to continued
efforts in debt reduction and improved fiscal
performance, Oman experienced positive
and stable improvements in its credit ratings
outlook during 2023, as recognized by credit
rating agencies.
The government’s budget for 2024 assumed
an average price of oil at US$ 60 a barrel.
Even with this conservative assumption of
crude oil prices, the budget deficit for 2024 is
estimated at OMR (640) million, representing
a 51 percent decline compared to the
2023 budget deficit of OMR (1.30) billion. At
this level, the budgeted fiscal deficit would
constitute about 1.5 percent of GDP. The
deficit is proposed to be financed through
external and domestic borrowing of OMR
240 million, along with drawing on reserves of
OMR 400 million. The government will continue
to rationalize its expenditure with increased
focus on targeted subsides and further
streamlining of administrative apparatus.
Furthermore, the actual oil price in 2024 is
likely to be much higher than that assumed in
the budget. Thus, the fiscal outcome in 2024
is expected to show significant improvement
over the budgeted outcome.
On the financial stability front, the banking
sector remained stable and sound with
licensed banks consistently maintaining robust
capital positions that exceeded regulatory
requirements. This not only underscores their
stability but also illustrates their capacity to
withstand economic and financial shocks.
The sector also maintained ample liquidity,
with banks maintaining substantial buffers.
These buffers have remained critical to
CURRENT ASSESSMENT AND MACROECONOMIC OUTLOOK
preserve banks’ resilience, as well as public
and investor confidence. This improvement
was driven by continuous economic growth
and prudent management of the loan
portfolio. Moreover, the CBO’s continuous
financial sector oversight, adoption of
appropriate regulatory measures, and
effective communication ensured financial
system stability.
A strong and vibrant banking system plays
a critical role in an economy by way of
financial intermediation and providing a
savings avenue for the public. During 2023,
the banking system in the Sultanate of Oman
showed improved performance with total
assets of the banking sector increasing by 7.8
percent to reach OMR 41.8 billion at the end
of 2023. Total credit increased to RO 30.5
billion in 2023 showing a Y-o-Y growth of 4.3
percent compared to its level in December
2022. The growth in credit was supported by
the accelerated growth in deposits. Total
deposits registered a Y-o-Y growth of 12.3
percent (OMR 29.1 billion) compared to their
level in December 2022.
The banking sector continued to be
profitable,
demonstrating
financial
sustainability. Gross non-performing loans
(NPLs) remained reasonably low, at 4.5
percent as of December 2023, indicating
strong asset quality. Also, the capital
adequacy ratio (CAR) stood at 18.9 percent
at the end of 2023, relatively higher than the
minimum regulatory requirement of 12.25
percent. Furthermore, the liquidity position of
banks remained comfortable as indicated
by the prescribed liquidity ratios. Banks were
not affected by the global banking turmoil
in early 2023 due to CBO’s prudent oversight
and banks’ domestic oriented business
model.
Monetary aggregates continued to expand
reasonably during 2023. While reserve money
(monetary base) expanded by 1.0 percent,
broad money grew by 13.1 percent. The
13
expansion of broad money was supported
by the growth in the net foreign assets of
the banking system, primarily attributed to
the increase in foreign assets held by other
depository corporations.
Under the fixed exchange rate regime and
open capital account, the CBO has limited
scope to pursue an independent monetary
policy. Nonetheless, the CBO can deploy
a number of instruments, including liquidity
facility and prudential norms, to foster
financial stability and economic growth.
Operating within a fixed exchange rate, the
CBO aligns its monetary policy with that of
the US Federal Reserve. In response to the
US Federal Reserve’s tightening of monetary
policy, the CBO has raised its policy rates
eleven successive times from March 2022
to July 2023. This action aims to safeguard
medium-term price stability.
The overnight inter-bank rate rose to 5.417
percent in December 2023 from 4.271
percent in December 2022. The rise in money
market rates in 2023 is attributed to a tight
liquidity policy stance. The CBO implemented
a tight monetary policy and raised interest
rates; however, these actions did not result
in higher lending rates by banks due to the
presence of ample liquidity in the system.
14
The availability of ample liquidity can be
advantageous for borrowers as it helps keep
borrowing costs relatively stable. Though the
demand for credit improved during the year,
fostering economic activity and investments.
The external position remained robust
in 2023, bolstered by a consistently
favorable merchandise trade balance
and improvements in both the services
and primary income balances. These
factors contributed to the current account
remaining in surplus. The services account
deficit narrowed significantly by 23.6 percent,
largely due to a surge in inward travel and
transportation services, which returned to
pre-pandemic levels. The primary income
scored a significant improvement on the back
of contraction in debits of direct investment
income and expansion of credit of investment
income as a whole. As a result of these
positive developments, the current account
posted a surplus of OMR 1,014 million in 2023,
compared to OMR 1,677 million in 2022. The
financial account recorded a higher net
outflow/net lending of OMR 1,490 million in
2023, compared to OMR 1,198 million in 2022,
reflecting positive performance in foreign
direct investment (FDI), portfolio investments,
and other investments.
CHAPTER I
Macroeconomic Outlook 2024
The global economic environment is
set to undergo gradual improvement,
yet macroeconomic vulnerabilities are
expected to persist. On the back of the
COVID-19 pandemic and Russia-Ukraine
war, the tightening of international financial
conditions
and
geopolitical
tensions
weighed on the global environment in 2023.
Geopolitical tensions have risen in recent
years and remained a predominant concern
overshadowing other risks to global growth.
The headwinds that followed have presented
new challenges for sustaining economic
recovery and pose challenges for economic
activities in the near future. Nevertheless, the
global economic outlook improved in the
beginning of 2024, with prospects of strong
economic activities. According to the WEO
Update of the IMF released in July 2024,
global growth rate is projected to continue
growing at 3.2 percent during 2024 and 3.3
percent in 2025, maintaining the same pace
as in 2023.
In 2023, inflation pressures began easing,
but many countries are still facing a
cost-of-living crisis, with varying impacts
across economies and inflation rescue
CURRENT ASSESSMENT AND MACROECONOMIC OUTLOOK
measures. Supported by a favorable
global environment and ongoing fiscal
adjustments, global inflation is projected to
decrease steadily, from 6.8 percent in 2023
to 5.9 percent in 2024 and 4.5 percent in
2025. Advanced economies are expected
to reach their inflation targets sooner
than emerging markets and developing
economies, driven by favorable supplyside developments and tight monetary
policies that anchor inflation expectations.
Nevertheless,
heightened
geopolitical
tensions could disrupt shipping and energy
production, potentially pushing inflation
rates higher once again. As a result, inflation
is anticipated to remain above central
banks’ targets in many countries.
The macroeconomic outlook of the Omani
economy remains favorable, supported
by sustained reforms under the strategic
direction of Oman Vision 2040, and favorable
energy prices, which are expected to
maintain fiscal and external balance
surpluses. The oil prices are expected to
remain at a higher-level providing crucial
support to hydrocarbon activities.
15
Non-hydrocarbon growth is expected to
gradually increase to 3.0 percent over
the medium term, supported by global
demand recovery, continued reforms, and
robust private investment amid a shift in
composition towards investments in nonhydrocarbon sectors. The fiscal outlook
for 2024 is projected to witness further
improvement, buoyed by favorable oil
prices and fiscal consolidation measures,
which have positively influenced both fiscal
and external positions.
Robust economic growth is anticipated
in the medium term, driven by nonhydrocarbon activities. The key drivers of
future growth are expected to include
16
diversification efforts, increased investments
in infrastructure and industrial sectors,
technological advancements, a boost in
tourism, expansion of the service sector, FDI
inflows, and government initiatives to support
innovation. These efforts are in line with the
government’s commitment to advancing
several national programs outlined in the
Tenth Five-Year Development Plan, aimed
at achieving the objectives of Oman Vision
2040. These national programs prioritize
identifying sustainable solutions for critical
areas such as the financial and economic
landscape,
employment,
attracting
investments, global competitiveness, and
digital transformation.
CHAPTER I
Inflation rates in 2023 are significantly
lower compared to those in 2022. This
reflects Oman’s commitment to increased
focus on diversification, maintaining the
currency peg to a strong US Dollar, and
ensuring prudent monetary policies,
including effective liquidity management.
These measures have been instrumental in
reducing inflation from 2.2 percent in 2022
to 0.9 percent in 2023. Keeping in view the
evolving conditions, the overall inflation
rate in Oman in the near future is expected
to remain stable in the range of 1.0-2.0
percent.
CURRENT ASSESSMENT AND MACROECONOMIC OUTLOOK
Looking ahead to 2024 and beyond, the
outlook for Oman indicates a continued
recovery in economic activity, despite global
headwinds, reflecting the positive response
to robust and sound macroeconomic
strategies. In 2024, growth is projected
to be higher, while inflation remains low.
The year ahead provides Oman with a
window of opportunity to accelerate
the implementation of structural reforms.
These reforms are critical to strengthen
the economy’s resilience while raising its
prospects, which are essential for Oman
to effectively address the challenges of
tomorrow.
17
CHAPTER
OUTPUT, EMPLOYMENT
AND PRICES
ANNUAL REPORT
Economic activity in the Sultanate of Oman
continued to expand and sustain positive
growth in 2023, driven by the recovery of
nonhydrocarbon sector, which showed
positive growth in real terms. The growth in
the hydrocarbon sector was supported by
an increase in natural gas output during the
year. The expansion in the nonhydrocarbon
sector was mainly due to growth in
agriculture, forestry, fishing, and the services
sector, while growth in the industrial sector
slightly declined. Inflation remained low,
largely reflecting lower energy prices, and
subdued global and domestic demand
conditions. Fiscal and external balances
showed comfortable surpluses in 2023, and
public debt was significantly reduced from
last year.
20
During the year, the government continued
its policy efforts to improve the business
environment and boost private sectorled growth to promote diversification in
Oman. Employment continued to grow
amid ongoing economic expansion,
and progress in large investment projects
throughout the year further contributed to
domestic growth.
Overall, the Omani economy is currently
having a favorable macroeconomic
outlook notwithstanding some downside
risks stemming from global factors such as
ongoing geopolitical tensions, disruptions in
global trade, and extreme climate events.
Against this backdrop, this chapter provides
a detailed account of developments in
output, employment, and prices in the
Sultanate of Oman during 2023.
CHAPTER II
Output
The Omani economy experienced a
contraction of 2.8 percent in nominal terms
during 2023 as against a growth of 28.2
percent in 2022 (Chart 2.1 & Table 2.1). This
decline was driven by a 13.7 percent drop in
the average oil price and a slight reduction in
oil production of about 1.5 percent following
OPEC+’s agreed production cuts.
As a result of these developments, the share
of hydrocarbon sector in nominal gross
domestic product (GDP) decreased to 35.8
percent in 2023 from 39.5 percent in 2022.
Within the hydrocarbon sector, the major
decrease in nominal output came from
crude petroleum, while natural gas output
increased at a relatively moderate pace
during the year. The hydrocarbon sector
contributed 72.0 percent to the government
revenues during 2023 as compared with
77.2 percent in 2022. On the other hand,
nominal growth in non-hydrocarbon
sector was primarily driven by agriculture &
fisheries, as well as service sector activities.
Chart 2.1: Nominal GDP Growth and Change in Oil Prices
50
40
30
20
10
0
-10
-20
2019
2020
2021
2022
2023
-30
-40
Growth in Nominal GDP
% Change in oil price (Omani Crude)
Hydrocarbon Sector
In 2023, the hydrocarbon sector continues to
play a crucial role in the economy. Nominal
output in the hydrocarbon sector contracted
to 11.9 percent during 2023, as compared
with 59.7 percent growth seen in 2022,
primarily due to OPEC+ agreed production
cuts and relatively lower oil prices (Chart
2.2). Reflecting abundant spare capacity
and strong non-OPEC+ supply growth, the
average oil price decreased by 13.7 percent
in 2023 to reach an average of USD 82.3 per
barrel from USD 95.4 per barrel in 2022, while
the oil production decreased by 1.5 percent.
OUTPUT, EMPLOYMENT AND PRICES
As a result, the hydrocarbon sector’s share
of nominal GDP fell from 39.5 percent in 2022
to 35.8 percent in 2023 (Chart 2.3). Within
the hydrocarbon sector, nominal output of
crude petroleum declined by 14.0 percent
in 2023, while natural gas output registered
a growth of 2.4 percent during the year
(Table 2.1 and 2.2). On the other hand,
the share of natural gas in nominal output
from total hydrocarbon sector increased to
14.6 percent in 2023 as compared with 12.5
percent in 2022 driven by price and output
dynamics within the sector.
21
Chart 2.2: Oil Production and Oil & Non-Oil GDP Growth
80
400
60
350
40
20
300
0
250
-20
-40
2019
2020
Growth in Non-Petroleum GDP
(left scale)
2021
2022
2023
Growth in Petroleum GDP
(left scale)
200
Oil Production (right scale)
Chart 2.3 : Share of Hydrocarbon and Non-Hydrocarbon
Sector in GDP at Current Market Prices
100
80
60
40
20
0
2019
2020
Hydrocarbon Sector
2021
2022
2023
Non-Hydrocarbon Sector
Non- hydrocarbon Sector
In recent years, the government’s increased
diversification efforts have underscored the
importance of the non-hydrocarbon sector in
the Omani economy. As a result, the pace of
non-hydrocarbon sector activities continued
to expand in 2023, supported by structural
reforms and robust private investment. The
nominal output from the sector grew by 1.7
percent in 2023, compared to 14.8 percent
growth in 2022.
22
The nominal output from the sector was
moderated mainly due to manufacturing,
telecommunications’, wholesale & retail
trade, and hotels and restaurants, which
declined by 12.7 percent, 2.1 percent, 1.4
percent and 1.0 percent, respectively, during
the year. In contrast, electricity and water
supply, and agriculture and fisheries grew by
7.5 percent, and 7.1 percent, respectively,
during 2023.
CHAPTER II
Non-hydrocarbon Industrial Activities
Nominal
output
of
non-hydrocarbon
industrial activities shrank by 5.7 percent
in 2023, compared to a growth of 21.3
percent in the previous year. This decline
was primarily driven by a 12.7 percent
contraction in the manufacturing sector. In
addition, the growth rate of the mining and
quarrying sector moderated to 4.1 percent
in 2023, down from 20.4 percent in 2022. The
electricity and water supply sector, another
component of non-hydrocarbon industrial
activities, recorded higher annual growth
rates of 7.5 percent in 2023, compared to 4.3
percent growth in 2022 (Chart 2.4 a and b).
Chart 2.4 (a): Sectoral Shares in Non-hydrocarbon GDP (Current Prices)
100%
80%
60%
40%
20%
0%
2019
2020
Non-Petroleum Industrial Activities
2021
2022
2023
Agriculture & Fishing
Services
Chart 2.4 (b): Contribution to Incremental Value Addition in Non-hydrocarbon
Sector (Current Prices)
700
500
300
100
-100
-300
2019
2020
Non-Petroleum Industrial Activities
OUTPUT, EMPLOYMENT AND PRICES
2021
2022
Agriculture & Fishing
2023
Services
23
Agriculture, Forestry and Fisheries
Nominal output of agriculture forestry and
fishing increased by 7.1 percent during 2023,
compared to 12.4 percent in the previous
year. However, despite the deceleration
in annual growth, the contribution of
agriculture forestry and fishing to the total
GDP increased to 2.3 percent in 2023, up
from 2.1 percent in 2022.
Services
The services sector output in nominal terms
witnessed a growth of 4.8 percent in 2023
compared with 12.3 percent a year ago.
The share of the services sector in total GDP
increased to 46.4 percent in 2023 compared
with 43.1 percent in 2022. Disaggregated
analysis reveals that all segments of
24
the services sector, except for ‘public
administration and defense’ and ‘real
estate and administrative service activities,’
moderated during 2023. The most significant
decline was in ‘wholesale and retail
trade’, which contracted by 1.4 percent,
followed by ‘hotels and restaurants,’ which
shrank by 1.0 percent. In contrast, ‘public
administration and defense’ increased by
7.7 percent, compared to a growth of 5.0
percent in 2022. Additionally, ‘real estate and
administrative services’ grew by 2.3 percent,
up from 1.4 percent in 2022. The slowdown in
growth also reflected normalising conditions
following the economic rebound in 2022,
which was supported by the reopening of
the economy and sizeable policy measures.
CHAPTER II
GDP at Constant Prices
Oman’s real GDP at constant prices (base
year 2018) grew by 1.3 percent during
2023 to reach OMR 38.3 billion, compared
with a strong performance when real GDP
expanded by 9.6 percent in 2022 (Table
2.3). The moderation was mainly due to
OPEC+’s agreed production cuts, which
led to hydrocarbon GDP growth of only 0.4
percent throughout the year. Additionally,
non-hydrocarbon GDP also moderated to
2.4 percent in real terms, down from the
high growth rate of 9.1 percent seen in 2022.
Within the petroleum activities, output from
crude petroleum declined by 0.1 percent,
while natural gas output increased by 3.1
percent in 2023. The share of petroleum sector
activities in overall GDP decreased slightly
to 32.5 percent in 2023 from 32.8 percent a
year ago. Real growth in non-petroleum GDP
was largely contributed by the agriculture,
forestry and fishing with 6.9 percent, and the
service sector with 3.5 percent growth, while
non-petroleum industrial activities declined
by 0.4 percent during 2023.
Industrial output in real terms, experienced
a contraction of 0.4 percent in 2023.
OUTPUT, EMPLOYMENT AND PRICES
Manufacturing sector which accounted
for 42.0 percent of non-petroleum industrial
activities declined by 4.4 percent during
2023. Nevertheless, within the industrial
sector, the electricity & water supply, and
construction grew by 5.7 percent, and 2.0
percent, respectively. With the continued
investment in the infrastructure sector by
the government, construction activity is
expected to witness sustainable growth in
the foreseeable future.
The service sector registered a real output
growth of 3.5 percent in 2023, compared
with 10.4 percent growth in the previous
year. Within the services category,
telecommunications and information service
activities recorded the highest growth at
8.4 percent, while financial and insurance
activities increased by 8.1 percent, real
estate and administrative activities grew
by 5.5 percent, and transport and storage
increased by 4.8 percent during 2023.
In contrast, accommodation and food
services activities, as well as wholesale and
retail trade, declined by 5.5 percent and 2.4
percent, respectively, during the year.
25
Employment
Oman has a young population, and with
continued improvement in education
over the years, there has been continuous
increase in the need for creating
employment opportunities for the young
and qualified Omanis joining the labor force.
The government enacted the new labor
law that supports flexibility by introducing a
remote work model, helps improve working
conditions, enhances labor market flexibility,
and boosts female labor force participation.
Additionally, the government has been
focusing on skill-building through various
initiatives so that new employment
opportunities in the area of information
technology, transformative technologies,
and digitalization could engage Omani
citizens. As a result, the quality of the skilled
labor force in the private sector is increasing,
allowing for a higher scope for Omanization.
Several programs and initiatives have
also been launched by the government
to encourage entrepreneurship and selfemployment among young Omani nationals
and promote small and medium enterprises
(SMEs). The SMEs Development Authority has
undertaken various measures to create a more
enabling environment for SMEs, including
providing funding, training programs, and
business development services.
One key initiative is the Entrepreneur Readiness
Program “Jahiziya Program”. This program
aims to foster a culture of entrepreneurship
26
through training, consulting, and mentorship
across several areas, targeting a wide
range of entrepreneurs. Completion of the
Jahiziya training program, which aims to
develop the capabilities of target groups in
all governorates of the Sultanate of Oman,
is a mandatory requirement for obtaining
services provided by the Authority. In 2023,
the Authority approved financing for 218
applications, with a total value exceeding
OMR 22 million.
Overall employment opportunities during
2023 increased by 6.1 percent, reflecting the
impact of sustained recovery of economic
activities in Oman. The employment
opportunities for Omani citizens and
expatriate workers increased by 4.0 percent
and 6.9 percent in 2023, respectively.
Public Sector
The number of Omani employees in the
public sector increased by 3.7 percent in
2023, while the number of expatriate workers
remained roughly the same as in 2022. Omani
nationals constituted 89.5 percent of the total
employees in the public sector in 2023 as
compared with 89.2 percent in 2022 (Chart 2.5).
During the year, the government continued
to pursue policies aimed at enhancing job
opportunities for young Omanis, reflecting
its commitment to economic growth and
workforce development.
CHAPTER II
Private Sector
With the steadfast implementation of labor
market reforms in Oman, it is anticipated
that the private sector will employ a greater
number of Omani nationals over the
years. Furthermore, the sustained focus on
diversifying the economy under Vision 2040
is expected to further stimulate employment
in the private sector. The government has
been actively implementing policies and
initiatives aimed at unlocking Oman’s
private sector potential and supporting its
growth. Additionally, a new labor law has
been enacted to modernize regulations
and enhance working conditions and
flexibility in the labor market.
Many segments within the private sector
have
demonstrated
robust
growth,
resulting in significant expansion in sector
employability. This expansion is expected
to help contain the public wage bill,
alleviate budgetary pressures, and support
fiscal sustainability. Consequently, overall
employment in the private sector saw
a 6.6 percent increase in 2023. Notably,
while jobs for citizens in the private sector
increased by 4.3 percent from 2.3 percent
in 2022, expatriate workers moderated to
7.1 percent in 2023 from 23.8 percent in
2022. The moderate growth of expatriate
workforce in 2023 also reflected normalizing
conditions in the aftermath of the full
removal of COVID-19-related restrictions.
Chart 2.5: Employment of Omanis in Public and Private Sector
500
400
300
Public sector
200
Private sector
100
0
2019
OUTPUT, EMPLOYMENT AND PRICES
2020
2021
2022
2023
27
Inflationary Conditions
Inflation conditions in the Sultanate of Oman
are influenced by both domestic and global
factors. Within the currency peg regime, the
CBO remains focused on its core mandate
of promoting monetary and financial
stability conducive to sustainable growth
and price stability. It is worth noting that the
high dependence on imports of goods and
services, along with the currency peg and
open capital account, accords a dominant
role to global factors in domestic inflation.
Nevertheless, domestic demand conditions
and fiscal policy measures in the form of
taxes, subsidies, administrative fees, and
other measures have successfully helped
to contain domestic inflation. As a result,
inflation remained contained in 2023.
Global financial conditions tightened
significantly in 2023, mainly due to persistent
inflationary pressures. These challenges
were further exacerbated by the ongoing
conflict between Russia and Ukraine and
the intensification of geopolitical tensions,
which resulted in higher energy prices
and supply chain disruptions. Although
financial conditions in many countries
eased somewhat towards the end of 2023,
due to lower global commodity prices and
improvements in global supply chains, they
remained elevated. Divergent trends were
observed in emerging market economies,
where supply disruptions exerted upward
pressure on commodity prices. This prompted
many central banks to maintain a tight
monetary policy stance throughout 2023 to
tame rising prices. Average retail inflation in
28
advanced economies eased to 4.6 percent
in 2023 from 7.3 percent in 2022 (IMF, WEO
April 2024). Similarly, inflation in emerging
markets and developing economies (EMDEs)
decreased from 9.9 percent in 2022 to 8.3
percent in 2023.
Inflation in Oman remained low in 2023,
with rates significantly lower compared to
2022. This decline reflects the impact of USD
appreciation, administrative interventions,
and Oman’s increased focus on economic
diversification.
Importantly,
proactive
government measures effectively mitigated
global inflationary pressures, keeping Oman’s
inflation rate within manageable limits.
Overall inflation (average based on the
consumer price index), was 1.0 percent
in 2023, a decrease from the 2.5 percent
observed in 2022 (Chart 2.6). Notably, the
restaurants and hotels group experienced
higher inflation during the year, while the
transport group showed a decline in prices.
In terms of demand and supply analysis,
weaker expectations about global demand
growth and subdued domestic demand
conditions, were the major driving force to
shape the benign inflationary conditions
in the Sultanate of Oman (Table 2.6). The
government also reduced its expenditure
by 12.9 percent in 2023, reflecting its
commitment to fiscal consolidation. Asset
prices channel also appears to have had
a dampening effect on demand as prices
across almost all asset classes fell during the
year – MSM 30 Share Price Index declined by
7.1 percent.
CHAPTER II
On the supply side, the international prices
of ‘fuel’ group dropped sharply by 16.4
percent in 2023 as against a 39.2 percent
rise in 2022, while the commodity prices of
‘non-fuel’ group decreased by 5.7 percent
against a decline of 7.9 percent during the
previous year. The disaggregated analysis
shows world metal prices decreased by 2.8
percent, trended lower due to reduced
demand from the construction sector,
particularly in China, while world food prices
ended last year declined about 6.8 percent,
helping further ease concerns over global
food price inflation (Table 2.6).
In 2023, the nominal effective exchange rate
(NEER) of the Omani Rial appreciated by
2.3 percent supported by global tightening
conditions, containing inflationary pressure
through imports. On the other hand,
Oman’s import prices index, encompassing
the impact of relative inflation, international
commodity prices and changes in the NEER,
increased by 3.2 percent, as against an 8.0
percent rise in 2022, driven by persistent
global inflation in 2023. Importantly, some
administrative measures undertaken in
recent years also influenced the inflation
outcome in the country.
A breakdown of the CPI components
suggested that inflation was relatively higher
for the restaurants and hotels which showed
an increase of 3.8 percent, followed by food
and non-alcoholic beverages group at 3.2
percent (Table 2.5). The disruptions to food
and energy markets were mainly caused
by the lingering effect of the pandemic,
geopolitical developments, and climate
related adversities.
Chart 2.6: Annual Consumer (retail) Inflation
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
OUTPUT, EMPLOYMENT AND PRICES
2020
2021
2022
2023
29
Chart 2.7: Sultanate CPI: Key Items for Policy Watch During 2023
125
120
115
110
105
100
95
90
2019
2020
Foods & non-alcoholic beverages
2021
2022
2023
Housing, water, electricity, gas and other fuels
Furnishings, Household Equipment & Routine Household Maintenance
Oil and Gas Production
Developments in World Oil Markets
The global oil market in 2023 witnessed World Economic Outlook (WEO) report
significant developments that increased the from April 2024, oil prices, which were 16.4
overall global supply and put downward percent lower in 2023 compared to 2022,
pressure on prices. These included increased are expected to decline by approximately
production from non-OPEC countries, 2.3 percent in 2024, reflecting a slowdown in
sustained Russian output despite sanctions, global economic activity. The average price
of oil, based on the simple average of UK
and
ongoing
geopolitical
tensions.
Brent, Dubai Fateh, and WTI crude oil, was
Additionally, a slower-than-expected global
$80.6 per barrel in 2023. This average price is
economic recovery in major oil-consuming
projected to decrease to $78.6 per barrel in
countries further influenced market dynamics.
2024 and further to $73.7 per barrel in 2025.
Oil demand rose from 99.4 mb/d in 2022 to
The EIA’s forecasts also align with this trend,
101.8 mb/d in 2023. As against this, global oil
reflecting the supply and demand dynamics
supply increased to meet the demand needs in the global oil market.
from 99.9 mb/d in 2022 to about 101.5 mb/d It’s worth noting that major central banks’
in 2023 (EIA Short Term Energy Outlook).
tightening measures in 2023, aimed
These combined factors led to a reduction at addressing persistent high inflation,
in oil prices in 2023. According to the IMF’s contributed to lower demand.
30
CHAPTER II
Economics of Oil and Gas in Oman
As capital became more expensive
to acquire due to higher interest rates,
borrowing costs increased. However, the
FED and other major central banks have
indicated potential easing of monetary
policies towards the end of 2024. Lower
interest rates generally stimulate economic
activity by making borrowing cheaper, which
can lead to increased industrial activity and,
consequently, higher energy consumption.
31OUTPUT, EMPLOYMENT AND PRICES
The average Omani oil price decreased by
13.7 percent to USD 82.3 per barrel in 2023
compared to USD 95.4 in 2022, and ranged
from a low of USD 74.8 in August to a high of
USD 92.8 in November (Table 2.11). Oil and
gas activities constituted about 35.8 percent
of nominal GDP in 2023. Their revenues
accounted for about 72.0 percent of total
government revenues in 2023 compared
with 77.2 percent in 2022.
CHAPTER 31
II
Crude Oil Production & Exploration
The average daily oil production decreased
by 1.5 percent to 1,048.7 thousand barrels
during 2023, and aggregate oil production
during the year decreased to 382.8 million
barrels (Table 2.7 and Chart 2.8), while the
production of condensate increased by 8.3
percent amounting to 85 million barrels in
2023. Oman exported 310.3 million barrels of
crude oil during 2023, 2.4 percent lower than
its high in 2022.
barrels a year ago. The share of oil exports in
total oil production decreased marginally
to 81.1 percent in 2023 from 81.9 percent
in 2022 (Chart 2.9). Exports to China, the
largest buyer of Oman’s crude, accounted
for nearly 92 percent of the Sultanate’s
total oil exports during 2023 compared with
81.6 percent in 2022. On the other hand,
exports to India declined by 91 percent to
2.7 million barrels in 2023 from 31.2 million
barrels in 2022. Oil exports to Japan and
Oil Exports
South Korea also fell by 19.7 percent and 57
Oman’s total oil exports for the full year 2023 percent to 9.4 million barrels and 5.2 million
slightly declined by 2.4 percent to 310.3 barrels in 2023, respectively.
million barrels compared with 318.0 million
Chart 2.8 : Oil Production and Prices
390
120
370
100
350
80
330
60
310
Production
40
290
20
270
Price (RHS)
0
250
2019
2020
2021
2022
2023
Chart 2.9 : Omani Crude Oil Production and Exports
95
400
90
300
85
200
80
100
75
70
0
2019
2020
Production
32
OUTPUT, EMPLOYMENT AND PRICES
2021
Exports
2022
%
2023
Exports as % of Production (RHS)
CHAPTER 32
II
Chart 2.10 : Destinations of Oil Exports 2023
92.0
1.6
0.8
1.7
China
Japan
0.9
3.0
India
South Korea
Malysia
Others
Natural Gas
Oman’s natural gas production recorded
an increase of 3.8 percent to 51,996 million
cubic meters in 2023. The associated gas
constituted about 21.1 percent of total
natural gas production in 2023 as against
20.1 percent in 2022 with a commensurate
decline in the share of non-associated gas
to 78.9 percent of total production in 2023
from 79.9 percent in 2022 (Table 2.9).
Mining
The government has taken proactive
measures to foster the expansion of the
mining sector in 2023. Initiatives have been
introduced to attract foreign investments,
streamline regulatory processes, and
promote sustainable mining practices.
Additionally, Oman has established mining
clusters and industrial zones to support sector
growth and facilitate downstream industries.
Mining is a focal sector under Oman’s
economic
diversification
program.
OUTPUT, EMPLOYMENT AND PRICES
The country’s mining industry has garnered
increasing interest from both foreign and
domestic operators, particularly as Oman
was the first GCC producer and exporter of
ferrochrome.
The mining sector’s strong performance
has not only bolstered Oman’s GDP
but also created job opportunities and
advanced economic diversification efforts.
By leveraging its mineral resources, Oman is
paving the way for a more sustainable and
diversified economy in the years ahead.
The total exports of minerals in the Sultanate
of Oman amounted to 40 million tons in
2023, an increase of 9 percent compared
to 2022. The quantity of building materials
exported increased by 4 percent compared
to the previous year, which constitute 52
percent of the total exports of mineral ores.
Additionally, gypsum ore exports increased
by 11 percent, which constitute 29 percent
of total exports.
33
New Projects
In 2023, several energy and mining projects in
the Sultanate of Oman progressed well and
achieved significant milestones, highlighting
the effectiveness of strategies aimed at
optimizing national resource utilization. The
adoption of project-based approaches
in
infrastructure
development
further
enhanced process efficiency by enabling
targeted resource allocation.
Key projects completed in 2023 included
Occidental Oman’s exploration programs,
OQ’s mega oil and gas projects, and Mineral
Development Oman’s minerals projects.
These achievements marked significant
milestones in their respective fields and are
poised to make substantial contributions
to the overall development and growth of
Oman’s energy and minerals sectors.
Occidental Oman made good progress in
2023. Oxy Oman advanced development
of the “Thuleilat Field” located in southcentral Oman. This included expanding
infrastructure
and
advancing
the
construction
of
production
handling
facilities and an interconnecting pipeline.
Additionally, Oxy Oman’s exploration
program successfully assessed the western
area of Aruma within the Mukhaizna field,
achieving an initial production of 400 barrels
34
of oil per day (159 MMBO) through horizontal
drilling. Additionally, Oxy Oman accelerated
the development of two Jawahir structures.
Planned upgrades to the Mukhaizna
Mechanical Vapor Compression (MVC) units
involved replacing 1,300 tubes in Train 3 and
initiating a program to replace 2,000 tubes in
Train 1. This marked the first major overhaul of
the MVC units since their startup.
OQ has been actively involved in several
projects across various sectors. One of
these projects, the ‘Ammonia plant project’
located in Salalah, represented a substantial
investment of USD 463 million. The project
successfully achieved financial completion in
October 2023 after undergoing the Lenders’
Reliability Test (LRT) in June of the same year.
This is a significant milestone that culminates
the projects in OQ’s Salalah Cluster.
Another project undertaken by OQ was the
“OTTCO (Oman Tank Terminal Company)
Project”. OTTCO is a key project in Oman,
particularly in the oil and gas sector. It
involves the construction and operation of
a large-scale storage terminal for crude oil
and petroleum products in Ras Markaz, near
Duqm. The terminal is strategically positioned
to serve as a hub for regional oil trading and
distribution, enhancing Oman’s capabilities
CHAPTER II
in the energy sector. The project moved
from the construction phase to operational
status in 2023, successfully passing the
Lenders’ Reliability Test (LRT) in August 2023.
Since its inception, OTTCO has completed 19
shipments and transferred 26.6 million barrels
through pipelines to OQ8.
The minerals sector, led by Mineral
Development Oman, has been actively
involved in several significant projects. One
such project is the “Mazoon Mining Project,”
where Mazoon Mining Company has played
a pivotal role in developing copper ore
extraction in the wilayat of Yanqul, within
the Al Dhahirah Governorate. The project
encompasses five mines holding copper ore
reserves totaling 22.9 million tons. The final
investment decision was issued to advance
the project. The Engineering, Procurement,
and Construction Management (EPCM)
tender was signed in November 2023. Project
development commenced in February 2024
and will span two and a half years.
Another project undertaken by Mineral
Development Oman was “Block 4
Redevelopment
Project”.
OUTPUT, EMPLOYMENT AND PRICES
The company has started redeveloping the
mines of Al-Aseel and Al-Bayda in block No 4
in the wilayat of Sohar and Liwa. The project
is one of the most prominent projects of the
transformation strategy of Oman Mining
Company. The mines in question contain
an estimated 2.78 million tons of copper ore
reserves.
Al-Ghuzayn project, led by “Mawarid
Mining”, is one of the most promising projects
in copper mining, aimed at bolstering
Oman’s economic diversification. Located
in the wilayat of Al Khaboura, the project
employs modern, environmentally friendly
underground mining techniques. With
reserves estimated at over 6 million tons and
an average copper ore concentration of 2.04
percent, the mine’s production capacity will
exceed one million tons per year. By 2023,
about 60 percent of the mine’s development
was completed, with actual production
set to begin in the second quarter of 2024.
As part of its local investment strategy, the
company constructed two power plants to
reduce dependence on diesel generators,
promoting clean energy and reducing the
carbon footprint.
35
Box 2.1 Determinants of Output Volatility in Oman: An Empirical Investigation1
As an oil-exporting country with a pegged
exchange rate regime, Oman is subject to
various types of external shocks that fuel
the volatility of its real output. Naturally, oil
prices may be thought of as the dominant
factor that causes output volatility in
Oman. While this is undoubtedly true for
the volatility of nominal output, it is not the
case for real output volatility. The existing
literature highlights various economic,
financial, geopolitical, and institutional
factors that could potentially impact the
volatility of real output growth. The study
conducted attempted to identify the major
determinants of real output volatility in
Oman over the short run. Additionally, to
investigate how this volatility is impacted by
several variables cited in the literature as its
potential determinants.
This study has three main objectives: (1)
to identify the main variables that impact
output volatility in Oman; (2) to quantify
the impact of each of these variables on
aggregate and sectoral output volatility
in Oman; and (3) to the extent possible,
to examine the channels through which
these determinants affect output volatility.
The empirical investigation attempted to
provide plausible answers to the research
questions both on the macro level (real GDP
volatility) and the sectoral level, where the
latter includes the volatility of each of total
non-hydrocarbon (NHC) output, agricultural
output (including fishing), services output,
and NHC industrial output.
Over the past few decades, output volatility
and its determinants have been the subject
of an enormous amount of empirical
literature. This study contributes to the
existing literature in a variety of ways. First,
up to our knowledge, there is no published
study that examines the determinants of
output volatility in Oman. Second, it adds
to the limited literature on the determinants
of output volatility in the GCC region. Third,
the majority of the empirical literature in this
area uses cross-sectional approach, using
a relatively large sample of countries, while
this study addresses the determinants of
output volatility in a time-series setting for a
single emerging-market economy. Finally, it
also contributes to the very limited literature
that analyzes the volatility of sectoral output,
rather than focusing only on the aggregate
output (GDP).
The empirical exercise started with a
preliminary ordinary least squares (OLS)
regressions of output volatility as the
dependent
variable
and
potential
determinants as independent variables, with
the inclusion of some variable interactions
to test specific hypotheses suggested by
the literature. The empirical methodology,
however, is mainly based on employing
vector autoregression with exogenous
variables (VARX) models to investigate
the impacts of candidate determinants
on output volatility. A VARX model is
a simultaneous equation, multivariate
version of the univariate autoregressive
(AR) process, in which each endogenous
variable is the dependent variable in one of
its equations.
Following the estimation of a battery of
5-variable VARX models, Granger causality
tests were used to check the direction
of statistical causality, if any, from each
endogenous
candidate
determinant
to output volatility. Then, cumulative
orthogonalized impulse response functions
(COIRFs) were used, for endogenous
variables,
and
cumulative
dynamic
multipliers (CDMs), for exogenous variables,
to measure the impact of potential
determinants on output volatility and
whether these impacts are statistically and
economically significant. COIRFs (CDMs)
trace the impact of a one-unit shock in
an endogenous (exogenous) variable on
output volatility through the entire VAR
system. That is done on the macro level, for
NHC GDP, and on the level of each of the
three individual NHC sectors.
This study has been prepared by CBO staff in the Financial Stability and Research Directorate, Financial Stability Sector. A Policy Brief
on this study covering more details will be shortly available on the Publications section of CBO’s website, available at: https://cbo.gov.
om/Pages/OccassionalPapers.aspx.
1
36
CHAPTER II
Table 2.1.1: Results from 5-Variable VARX Models: COIRFs and CDMs (1)
Potential
Determinants
Endogenous
Variables
Exogenous
Variables
Output Volatility Variables
Real GDP
Volatility
NHC GDP
Volatility
Agricultural
Output Volatility
Services
Output
Volatility
Industrial
Output
Volatility
Output Growth (2)
–0.57*** to
–0.79***
–0.75** to
–1.23**
1.44**
–0.51*** to
–0.84***
–0.93** to
–0.97**
Trade Openness
0.32***
–0.75**
1.35**
–0.39**
–2.36***
NHC Exports Share
–0.44**
–1.51**
Nominal Effective
Exchange Rate
(NEER)
0.43***
1.96***
0.45**
0.12** to 0.75**
4.49***
NEER Volatility
0.59***
0.85***
0.87***
0.67**
1.50**
Credit Volatility (3)
0.15**
Government Size (4)
0.28** to 1.18**
0.82**
–1.88***
0.47**
–0.82**
Volatility of
Government Size (4)
0.61**
1.04**
2.58**
0.85** to 0.92**
–0.85**
Oil Price Volatility
0.05**
0.11**
0.08**
0.38**
Global Uncertainty
2.04*** to
11.02**
Institutional Quality
–52.23***
0.23**
0.31** to 1.59**
–12.05*** to
–12.07**
–85.29**
–29.72***
–42.45**
–215.16**
(1) Table entry is the value of either the cumulative orthogonalized impulse response function (COIRF) for endogenous
variables or the cumulative dynamic multiplier for exogenous variables. In both cases, the impulse variable is the
potential determinant (in rows) while the response variable is output volatility (in columns). Positive values indicate the
determinant is destabilizing (associated with higher output volatility), while negative values indicate the determinant
is stabilizing (associated with lower output volatility). ***, **, and * indicate statistical significance at %5 ,%1, and %10
levels, respectively.
(2) For the five columns shown, this variable refers to real growth in GDP, NHC GDP, agricultural output, services output,
and NHC industrial output, respectively.
(3) We use “total credit” for real GDP volatility, but “credit to the private sector” for all other volatility variables.
(4) Government size is measured by the ratio of total government expenditure to nominal GDP.
OUTPUT, EMPLOYMENT AND PRICES
37
Table 2.1.1 summarizes the main
statistically-significant results from COIRFs
and CDMs. These results provide some
evidence that, on the macro level, the
only variables that stabilize the volatility
of both real GDP and NHC GDP, with
relatively sizable cumulative impacts
over 1-3 years ahead, are output growth,
the share of NHC exports in merchandise
exports, and institutional quality. For
example, a random one-percentagepoint increase in real GDP growth would
reduce real GDP volatility by 0.6-0.8%, on
average, over 2 years ahead. Similarly,
a random one-percentage-point (0.01)
increase in the institutional quality index
(ranges from 0 to 1) would reduce real
GDP volatility by about 0.5%, on average,
over 3 years ahead.
On the other hand, variables that
are destabilizing both GDP and NHC
GDP include oil price volatility, NEER
& its volatility, as well as government
size and its volatility. Trade openness,
however, is stabilizing NHC GDP, but is
destabilizing real GDP. Moreover, both
global uncertainty and credit volatility
show statistically-significant destabilizing
impacts on the macro level, but no
significant impact on the volatility of NHC
GDP.
On the sectoral level, the analysis of the
three individual NHC sectors provides
mixed results, which is common in the
38
limited literature involving sectorallevel analyses. In particular, both the
level and volatility of NEER show strong
destabilizing impacts, that are highly
statistically-significant and quantitatively
important, in all three sectors. Moreover,
output growth and trade openness are
highly stabilizing in both the services and
industrial sectors, but both are associated
(at least weakly) with higher output
volatility in the agricultural sector. There
is also some evidence of a stabilizing
impact of a larger government size in both
the agricultural and industrial sectors,
while the same factor is destabilizing in
the services sector, possibly reflecting
different cyclical behavior of government
expenditure allocated to different NHC
sectors. In addition, oil price volatility and
institutional quality have strong positive
and negative impacts, respectively, on
output volatility in both the services and
industrial sectors, but their impacts in
the agricultural sector are insignificant.
Moreover,
global
uncertainty
demonstrates a solid stabilizing impact on
both agricultural and industrial outputs,
but no significant impact on the services
output. Finally, the results provide some
empirical evidence on a destabilizing
impact of credit volatility in both the
agricultural and industrial sectors, but not
in the services sector.
CHAPTER II
Table 2.1
Output Indicators
Item
2019
2020
2021
2022
2023*
33,859.4
29,187.2
33,576.0
43,042.4
41,837.8
-3.8
-13.8
15.0
28.2
-2.8
34,786.9
33,611.2
34,479.1
37,781.2
38,276.3
-1.1
-3.4
2.6
9.6
1.3
97.3
86.8
97.4
113.9
109.3
-2.7
-10.8
12.1
17.0
-4.1
31.0
26.5
30.6
39.5
35.8
1.1 Crude Petroleum
26.3
21.4
26.4
34.5
30.6
1.2 Natural Gas
4.7
5.1
4.6
5.0
5.2
2. Non-Petroleum Activities
73.1
78.2
73.7
64.3
67.3
2.1 Agrl. and Fishing
2.0
2.5
2.1
2.1
2.3
2.2 Industry
20.4
20.7
20.5
19.1
18.6
2.3 Services Activities
50.7
55.0
51.0
43.1
46.4
a. Private Consumption
37.4
44.0
39.2
34.3
NA
b. Government Consumption
23.1
26.1
22.1
17.9
NA
c. Capital Formation (investment)
29.0
31.6
26.9
22.5
NA
d. Exports-Imports (goods and services)
45.2
40.9
49.4
59.2
NA
GDP at Current Market Price (R.O. Million)
Annual Growth (%)
GDP at Constant 2018 Prices (R.O. Million)
Annual Growth (%)
GDP Deflator
Annual Growth (%)
Share in GDP at Current Market Price (in percent)**
1. Petroleum Activities
Component of GDP (in percent)
* Provisional
** Shares may not add up to 100 because two items are not considered here, i.e. net import taxes and financial intermediation services
indirectly measured.
Note: The base year for GDP estimation has been changed to 2018 from 2010 earlie
Source: National Center for Statistics and Information, Statistical Year Book 2023
OUTPUT, EMPLOYMENT AND PRICES
39
Table 2.2
Gross Domestic Product at Current Market Prices
(Rial Omani Million)
Activitiy
1. Industry (1.1 + 1.2)
2019
2020
2021
2022
2023*
%
%
Change Change
(2022/21) (2023/22)
17,396.7 13,761.1 17,435.0 25,228.1 22,734.0
44.7
-9.9
10,484.4 7,727.5 10,644.1 16,993.7 14,971.2
59.7
-11.9
- Crude Petroleum
8,896.6
6,248.7
9,102.5 14,862.0 12,788.2
63.3
-14.0
- Natural Gas
1,587.8
1,478.8
1,541.6
2,131.7
2,183.0
38.3
2.4
6,912.3
6,033.6
6,790.9
8,234.4
7,762.8
21.3
-5.7
- Mining and Quarrying
236.8
210.1
182.9
220.2
229.3
20.4
4.1
- Manufacturing
2,718.7
2,438.9
3,159.4
4,334.7
3,782.2
37.2
-12.7
- Electricity & Water Supply
755.2
801.4
870.4
908.1
976.4
4.3
7.5
- Construction
3,201.6
2,583.2
2,578.2
2,771.4
2,774.8
7.5
0.1
675.4
720.7
803.2
902.4
966.4
12.4
7.1
17,157.7 16,060.0 16,504.7 18,534.4 19,424.6
12.3
4.8
- Wholesale & Retail Trade
2,794.6
2,627.2
2,851.1
3,254.9
3,208.7
14.2
-1.4
-Hotels and Restaurants
712.4
434.0
446.6
612.1
606.2
37.1
-1.0
- Transportation & Storage
1,872.8
1,131.1
1,372.5
2,075.1
2,439.9
51.2
17.6
599.2
558.2
536.8
580.1
568.0
8.1
-2.1
2,119.1
2,276.3
2,410.4
2,626.0
2,728.1
8.9
3.9
1,995.3
1,951.0
1,978.9
2,007.1
2,053.5
1.4
2.3
- Public Administration & Defence
3,671.4
3,441.1
3,439.8
3,611.8
3,891.0
5.0
7.7
- Other Services
3,393.0
3,641.1
3,468.6
3,767.3
3,929.3
8.6
4.3
24,745.4 22,814.3 24,098.8 27,671.2 28,153.8
14.8
1.7
7.2
-3.4
1.1 Petroleum Activities
1.2 Non-Petroleum Industrial Activities
2. Agriculture &Forestry & Fishing
3. Services
- Telecommunications and Information Service Activities
- Financial Intermediation
- Real Estate, Professional & Technical &
Administrative Service Activities
4. Total Non-Petroleum Activities (1.2 + 2 +3)
5. Less Financial Intermediation Services Indirectly
Measured
825.1
813.7
883.5
947.2
979.3
6. Gross Domestic Product at Producers Prices
(1.1+4-5)
34,404.7 29,728.1 33,859.4 43,717.7 42,145.7
29.1
-3.6
7. Plus :Taxes Less Subsidies on Products
-545.3
-307.8
138.3
54.4
8. Gross Domestic Product at Market Prices (6+7) 33,859.4 29,187.2 33,576.0 43,042.4 41,837.8
28.2
-2.8
-541.0
-283.4
-675.3
* Provisional
Source: National Center for Statistics and Information, Statistical Year Book 2023
40
CHAPTER II
Table 2.3
Gross Domestic Product at Constant Prices (Base Year 2018)
(Rial Omani Million)
Activitiy
1. Industry (1.1 + 1.2)
2019
2020
2021
2022
2023*
%
%
Change Change
(2022/21) (2023/22)
18,523.818,515.5 18,732.5 20,499.0 20,511.4
9.4
0.1
1.1 Petroleum Activities
11,135.410,912.1 11,245.7 12,397.6 12,441.3
10.2
0.4
- Crude Petroleum
9,512.7 9,375.2 9,600.8 10,655.4 10,644.3
11.0
-0.1
- Natural Gas
1,622.6 1,536.9 1,644.9 1,742.2 1,796.9
5.9
3.1
7,388.4 7,603.4 7,486.8 8,101.4 8,070.1
8.2
-0.4
- Mining and Quarrying
263.4
224.7
2.5
2.5
- Manufacturing
3,178.8 2,819.5 3,019.2 3,544.1 3,386.8
17.4
-4.4
- Electricity & Water supply
793.8
964.7
5.2
5.7
- Construction
3,152.4 3,789.6 3,386.0 3,425.7 3,493.9
1.2
2.0
2. Agriculture &Forestry & Fishing
678.4
-8.5
6.9
3. Services
16,772.315,328.1 16,107.1 17,778.0 18,404.2
10.4
3.5
- Wholesale & Retail Trade
2,936.7 2,651.3 2,744.0 3,024.4 2,951.1
10.2
-2.4
-Accommodation & food service Activities
715.6
566.2
1.0
-5.5
- Transport & Storage
1,669.6 1,558.9 1,862.8 2,230.1 2,337.4
19.7
4.8
- Telecommunications and Information Service
Activities
610.5
578.2
-9.3
8.4
- Financial & Insuarance Activities
1,987.9 1,881.1 1,884.1 1,954.6 2,113.3
3.7
8.1
- Real Estate, Professional & Technical &
Administrative Service Activities
1,948.4 2,132.7 2,103.5 2,626.1 2,770.7
24.8
5.5
- Public Administration & Defence
3,676.2 2,838.6 3,256.7 3,432.1 3,540.2
5.4
3.1
- Other Services
3,227.4 3,117.5 3,074.3 3,378.1 3,547.1
9.9
5.0
24,839.123,706.9 24,443.2 26,656.2 27,304.7
9.1
2.4
2.9
-5.3
6. Gross Domestic Product at Producers Prices (1.1+4-5) 35,154.433,902.9 34,809.1 38,148.3 38,792.5
9.6
1.7
7. Plus :Taxes Less Subsidies on Products
-367.5
-516.2
11.2
-40.6
8. Gross Domestic Product at Market Prices (6+7)
34,786.933,611.2 34,479.1 37,781.2 38,276.3
9.6
1.3
1.2 Non-Petroleum Industrial Activities
4. Total Non-Petroleum Activities (1.2 + 2 +3)
5. Less Financial Intermediation Services Indirectly
Measured
820.1
239.4
754.9
775.4
547.8
600.2
716.0
-291.8
213.9
867.7
849.3
593.7
588.0
879.8
-330.0
219.2
912.5
776.8
599.4
533.2
905.5
-367.1
830.4
953.4
* Provisional
Source: National Center for Statistics and Information, Statstical Year Book 2023
OUTPUT, EMPLOYMENT AND PRICES
41
Table 2.4
Sector Wise Employment in Oman
Category
2019
2020
2021
2022
2023*
237,363
393,184
392,872
407,494
420,975
Omanis
202,893
349,272
351,231
363,438
376,856
Expatriates
34,470
43,912
41,641
44,056
44,119
B. Private Sector Employees**
1,920,444
1,720,099
1,717,798
2,046,431
2,181,345
Omanis
262,333
352,735
374,606
383,179
399,803
Expatriates
1,658,111
1,367,364
1,343,192
1,663,252
1,781,542
A. Public Sector Employees
*; Data before 2020 are not comparable to later years because of expanded coverage.
**; Private, Family, Communal and Other Sectors.
Table 2.5
Sultanate Consumer Price Index (100 = 2018)
% Change % Change
2022/21
2023/22
Item
Weights
2020
2021
2022
2023*
1. Food & Non -Alcoholic Beverages
20.615
102.5
103.0
107.7
111.2
4.6
3.2
Cereals & Breads
3.093
100.2
101.4
105.5
108.0
4.0
2.4
Meat
5.102
100.5
101.2
108.3
109.0
7.0
0.6
Fish & Sea Food
1.981
100.5
104.3
107.2
116.6
2.8
8.8
Milk , Cheese & Eggs
2.517
100.1
100.3
103.4
111.7
3.1
8.1
Oil & Fats
0.594
99.6
101.0
117.3
124.8
16.1
6.4
Fruits
2.197
103.7
101.6
106.7
109.4
5.0
2.5
Vegetables
2.088
112.8
110.3
113.5
114.4
2.9
0.8
0.857
100.2
101.8
104.3
108.3
2.5
3.8
Sugar, Jam,Honey, Chocolate &
Confectionary
Food Products n.e.c.
0.424
100.5
101.5
102.7
107.2
1.2
4.4
Non- Alcoholic Beverages
1.762
107.6
108.6
110.1
111.9
1.4
1.7
2. Tobacco
0.110
192.6
200.3
202.9
206.0
1.3
1.5
3. Clothing & Footwear
6.129
97.8
98.7
100.0
100.2
1.3
0.2
4. Housing,Water,Electricity, Gas &
Other Fuels
31.701
99.5
100.3
101.7
102.0
1.4
0.3
5. Furnishings,Household Equipment &
Routine Household Maintenance
6.327
103.3
104.8
106.5
110.0
1.6
3.3
6. Health
1.424
100.0
100.0
103.5
104.5
3.5
1.0
7. Transport
14.521
96.3
102.9
106.6
103.5
3.6
2.9-
8. Communication
5.874
98.2
98.0
97.8
97.5
0.2-
0.3-
9. Recreation and Culture
1.142
100.3
102.8
104.7
106.9
1.8
2.1
10. Education
2.388
103.2
105.0
111.0
110.7
5.7
0.3-
11. Restaurants and Hotels
4.493
101.2
101.2
104.0
107.9
2.8
3.8
12. Miscellaneous Goods and Services
5.276
100.9
103.7
105.5
108.4
1.7
2.7
General Price Index
100.0
100.1
101.7
104.3
105.3
2.5
0.9
Note:
1. The weights are based on Household Expenditure and Income Survey by taking average for the years 2008, 2009 and 2010.
2. Data collected from all Governorates of the Sultanate Excluding Musandam and AL Wustta Governorates.
3. Data are compiled on the basis of 28,168 priced items of goods and services from 1721 selected sources.
4. Data on rent are collected from a sample of 1150 rented units.
Source: National Center for Statistics and Information, Statical Year Book 2023
42
CHAPTER II
Table 2.6
Broad Sources of Inflation (Percent)
Item
2019
2020
2021
2022
2023
(a) GDP Growth
-3.8
-13.8
15.0
28.2
-2.8
(b) Increase in Governmet Expenditure
-2.9
-2.2
-3.9
7.3
-12.9
(a) Broad Money (M2) Growth
2.0
8.9
4.6
0.6
13.1
(b) Credit Growth
3.1
3.3
4.5
4.8
4.3
-0.7
0.9
23.4
21.5
6.8
6.4
2.6
43.5
0.6
2.8
(c) Housing, Water, Electricity, Gas and Other Fuels (Oman)
-
-0.4
0.8
1.4
0.3
(d) Regional Inflation (Middle East & North Africa)
8.0
10.9
13.9
14.8
5.3
(e) NEER* Variation
2.1
-0.3
-0.7
8.1
2.3
Demand Condition
Monetary Expansion
Supply Constraints/External Shocks
(a) World Food Prices1
(b) World Metal Prices
2
3
4
(f) Change in Import Price
-19.0
21.2
-0.9
8.0
3.2
(g) Foreign Labour in Pvt. Sector (annual absolute increase)
-71602
-290747
-24172
320060
118290
5
* : Yearly average of Nominal Effective Exchange Rate Variation of RO (import weighted); minus indicates depreciation.
Source: 4&1,2: IMF., 3: National Center for Statistics and Information (Rent Component in the CPI for the Sultanate).
5: Derived from NCSI data on value of imports and quantity of imports.
Table 2.7
Oil Production & Exports
(Million Barrels)
Year
Production
%
Change
Exports
%
Change
2019
354.4
-0.8
310.3
7.3
2020
347.9
-1.8
287.0
-7.5
2021
354.5
1.9
289.0
0.7
2022
388.4
9.6
318.0
10.0
2023
382.8
-1.5
310.3
-2.4
Source: Ministry of Energy and Minerals & National Center for Statistics and Information.
OUTPUT, EMPLOYMENT AND PRICES
43
Table 2.8
Destinations of Oil Exports
(Million Barrels)
Country of Destination
2019
2020
2021
2022
2023
China
243.3
248.1
242.2
259.8
285.6
Japan
23.3
3.9
4.2
11.7
9.4
Korea, South
10.5
5.0
6.5
12.1
5.2
India
14.8
17.8
28.9
31.2
2.7
Thailand
0.5
0.7
1.2
1.9
0.6
Singapore
0.0
0.3
2.1
0.0
0.0
Others
17.9
11.2
3.9
1.3
6.8
Total
310.3
287.0
289.0
318.0
310.3
Source: Ministry of Energy and Minerals.
Table 2.9
Production & Uses of Natural Gas
(Million Cubic Meter)
2022
2023*
% Changes
2023/22
Production
50085
51996
3.8
Associated
10,064
10,983
9.1
Non - Associated
40020.9
41012.7
2.5
Uses
52,062
53,925
3.6
A- Power Generation
7,774
8,774
12.9
B- Industrial Areas
250
260
4.0
C- Industrial Projects
31,403
31,639
0.8
D- Oil Fields
12,636
13,253
4.9
Imports
1,977.2
1,929.5
-2.4
*Provisional.
Source: National Center for Statistics and Information, Statistical Year Book 2023.
44
CHAPTER II
Table 2.10
Oman’s Mining and Quarrying Production
(Million Tons)
Description
2022
2023
% Changes
2023/22
Marble
1.1
1.5
36.4
Limestone
12.2
12.6
3.3
Gypsum
10.6
13.3
25.5
Salt
0.0
0.0
0.0
Chromite
0.4
0.4
0.0
Iron (Laterite)
0.5
0.5
0.0
Clay
0.8
0.9
12.5
Sand
0.3
0.3
0.0
Kaolinite
0.0
0.0
0.0
Silica
0.0
0.0
0.0
Source: Ministry of Energy & Minerals.
Table 2.11
Oman’s Oil Prices ‘(US $/ Barrel)
Month
2019
2020
2021
2022
2023
January
66.28
62.81
43.83
80.26
86.15
February
57.33
65.49
50.00
73.14
77.43
March
59.36
64.89
54.79
83.62
80.92
April
64.48
54.61
60.85
91.96
82.23
May
66.98
34.85
64.43
110.96
78.49
June
71.15
23.65
63.10
102.40
83.28
July
69.99
33.68
66.40
107.22
74.94
August
61.72
41.58
71.66
112.93
74.78
September
63.87
43.62
72.73
103.21
80.54
October
59.68
44.32
69.38
97.00
86.57
November
61.81
41.60
72.78
90.80
92.77
December
60.26
41.11
81.58
90.79
89.79
Average (Jan-Dec)
63.58
46.02
64.29
95.36
82.32
Source: Ministry of Energy and Minerals & National Center for Statistics and Information.
OUTPUT, EMPLOYMENT AND PRICES
45
CHAPTER
PUBLIC FINANCE
ANNUAL REPORT
Overall Fiscal Assessment
Oman’s fiscal position continued to
improve,
maintaining
a
comfortable
surplus in 2023. Throughout the year, the
government remained steadfast in its
commitment to fiscal consolidation. Both
the fiscal deficit and government debt were
effectively contained. Fiscal reforms were
geared towards rationalizing expenditure,
enhancing non-oil revenue mobilization,
and streamlining administrative efficiency.
Notably, global oil prices remained favorable
throughout the year bolstering government
revenue and strengthening the overall fiscal
position of the Sultanate of Oman. These
developments have generated fiscal space
for the government to undertake productive
expenditure while remaining on the course of
fiscal consolidation outlined in the MediumTerm Fiscal Plan (MTFP).
It is worth noting that, the government
continued to prudently utilize its oil revenue
to proactively repay a portion of its external
debt, thereby reducing its indebtedness and
enhancing its future prospects for accessing
international markets.
Government’s realized revenues exceeded
the budget estimates by 24.8 percent,
increasing to OMR 12,542 million in 2023. The
non-hydrocarbon revenues as a percentage
of non-hydrocarbon GDP increased to 12.5
percent in 2023 compared with 11.9 percent
a year ago. Importantly, the contribution
of non-hydrocarbon revenues to total
government revenues increased to 28.1
percent in 2023 from 22.8 percent in 2022,
mainly reflecting heightened growth in other
current revenues (Table 3.1 and Chart 3.1).
Government Revenues
The fall in oil prices by 13.7 percent in 2023
was a leading cause for the 13.3 percent
decline in government revenues during the
year (Table 3.2 and Chart 3.2). Lower natural
gas prices in global markets also adversely
impacted government revenues in 2023.
Net oil and gas revenues declined by 6.2
percent and 47.4 percent, respectively,
in 2023. In terms of contribution, the
hydrocarbon sector was the main source
of government revenues at 72.0 percent.
Non-hydrocarbon revenues increased by
6.8 percent, constituting 28.1 percent of
total government revenues. The growth in
non-hydrocarbon revenues was driven by
other current revenues, whose share in total
revenues increased to 27.9 percent in 2023
from 22.4 percent in 2022.
Chart 3.1: Ratio of Total Revenue to GDP
40
31.3
30
33.3
29.1
20
30.0
16.7
18.0
13.3
33.6
13.5
15.6
16.6
17.7
48
Ratio of Oil
Revenue to GDP (%)
17.1
Ratio of Other
Revenue to GDP (%)
15.9
12.9
10
0
2019
Ratio of Total
Revenue to GDP (%)
2020
2021
2022
2023
CHAPTER III
Other Current Revenues
Other current revenues increased by 7.8
percent during 2023, reflecting improvement
in economic activity (Table 3.3). In absolute
terms, it increased by OMR 252 million in
2023. The taxes and fees revenue increased
by 11.4 percent and contributed 58.6
percent to other current revenues during
2023 as compared with 56.7 percent in 2022.
Income tax collections from companies and
establishments increased by 40.3 percent
in 2023. Non-tax revenue posted modest
growth of 3 percent in 2023. Airport and port
revenues, rent from government real estate
and interest on bank deposits and lending,
were the major items showing promising
developments under non-tax revenue.
Chart 3.2: Overall Fiscal Balance
15000.0
12500.0
10000.0
7500.0
5000.0
2500.0
0.0
- 2500.0
2019
- 5000.0
2020
Total Revenue
2021
Total Expenditure
2022
2023
Deficit/surplus
Chart 3.3: Components of Fiscal Expenditure
14000
12000
10000
8000
6000
4000
2000
0
2019
Current Expenditure
PUBLIC FINANCE
2020
Investment Expenditure
2021
2022
Participation & Other Expenses
2023
Oil &Gas Production Expenditures
49
Government Expenditure
of 7.4 percent in 2022 (Chart 3.4). Current
expenditure with a share at about 74
percent in total expenditure was the largest
component of total expenditure. The current
expenditure on defense and national security
declined by 1.2 percent and public debt
service declined by 3 percent in 2023. The
share of public debt service in total current
Current expenditure
expenditure increased by 12 percent.
The Current expenditure in 2023 declined by Current expenditure on civil ministries also
15.2 percent compared with a growth rate increased by 3.8 percent in 2023.
The government expenditure in 2023 at OMR
11,606 million was lower by 12.9 percent
compared with OMR 13,329 million in 2022
(Chart 3.3). The decline in expenditure was
mainly attributed to the decline in current
expenditure by 15.2 percent and contribution
and other expenses by 12.5 percent.
Chart 3.4: Compositional Shifts in Total Expenditure
20
80
15
70
10
60
5
50
0
-5
40
-10
30
-15
20
-20
10
-25
0
-30
2019
50
2020
2021
2022
Share of Current Expenditure in Total
Expenditure
Share of Investment Expenditure in
Total Expenditure
Growth in Current Expenditure (RHS)
Growth in Investment Expenditure (RHS)
2023
Share of Participation & Other
Expenses in Total Expenditure
CHAPTER III
Investment Expenditure
Investment expenditure expanded by
4.4 percent in 2023 and constituted 11.7
percent of total expenditure. The increase
in investment expenditure was driven by
development expenditure of civil ministries.
in electricity subsidy by 8.4 percent and oil
product subsidy by 49.3 percent.
Government Debt
Consecutive
budget
surpluses
have
supported government’s effort to lower
Contribution and other expenses
public debt from OMR 17.6 billion in 2022
to OMR 15.3 billion in 2023. Through a
Expenditure on government participation prudent debt management strategy, the
and other expenses declined by 12.5 percent government has effectively managed to
in 2023.The decline in spending under this reduce its debt to GDP ratio to 36.5 percent
category was primarily due to sharp decline in 2023 from 40.9 percent in 2022 (Table 3.5).
Chart 3.5: Government Debt to GDP Ratio and Debt Service Ratio
70
60
50
40
30
20
10
0
2019
2020
2021
Governmnet Debt
to GDP Ratio
PUBLIC FINANCE
2022
2023
Debt Service Ratio
51
2023 General Budget vis-à-vis Actual Outcome
Total revenues in 2023 surpassed the budget
estimates by a significant margin of 25
percent. This was mainly due to an increase
in hydrocarbon revenues, which were about
34.4 percent higher than budget estimates,
and non-hydrocarbon revenues, which were
5.8 percent above estimates (Table 3.6).
On the other hand, the actual government
expenditure overshot the budget estimates
by about 2.3 percent with higher investment
expenditure by 51.4 percent. In 2023, the
fiscal balance reported a surplus of OMR 936
million while the budget estimate showed a
deficit of OMR 1,300 million (Chart 3.6).
State General Budget 2024
The 2024 budget has been prepared based
on set of economic and social objectives
in line with the 10th Five-Year Development
Plan (2021-2025) and Oman Vision 2040. The
2024 budget assumes an average oil price
of US $ 60 per barrel and oil production at
1,031 thousand barrels a day. Aggregate
revenue is estimated at OMR 11,010 million
in 2024 budget, up by 9.6 percent over 2023
budget. Net oil revenue is estimated at OMR
5,915 million, constituting 53.7 percent of
total revenue, indicating an increase by 11.2
percent compared to 2023 budget.
Gas revenue is estimated at OMR 1,575
million, accounting for 14.3 percent of total
revenue, and up by 12.5 percent over the
2023 budget. This is attributed to the rise in the
quantities of gas sold and an approximately
3 percent increase in the domestic selling
price of gas.
Non-hydrocarbon revenues were budgeted
to increase by 5.7 percent over 2023 budget
(Chart 3.6). Other current revenues were
estimated to amount to OMR 3,455 million in
2024 budget. Excise tax and VAT revenues
are expected to stand at OMR 645 million
in 2024. Moreover, corporate income tax
revenue is estimated at OMR 630 million.
Government revenue from OIA is estimated
at about OMR 800 million. In addition to the
government service fees revenues which is
anticipated at OMR 1,380 million, capital
revenue and repayments are estimated at
OMR 65 million in 2024 budget.
The 2024 budget estimates for total
government expenditure is expected to
increase by 2.6 percent to OMR 11,650
million over the 2023 budget. Out of total
expenditure budgeted for 2024, current
expenditure, and participation & other
expenses would comprise 73.6 percent, and
18.7 percent, respectively (Chart 3.6).
Chart 3.6: 2022 Budget Vis-a-vis Outcome
14000
12000
10000
8000
Budget
6000
Outcome
4000
2000
0
-2000
52
Total Revenu es
Total Expen ditu re
Su rplus/Deficit
CHAPTER III
Table 3.1: Indicators of Fiscal Management
Items
2019
2020
2021
2022
2023*
Fiscal Balance as % of GDP
-7.7
-15.2
-3.6
2.7
2.2
Total Revenues as % of GDP
31.3
29.1
33.3
33.6
30.0
Net Oil Revenues as % of GDP
18.0
13.5
16.7
17.7
17.1
Non-Oil Revenues as % of non-hydrocarbon GDP
10.5
11.9
12.3
11.9
12.5
Total Expenditure as % of GDP
39.0
44.3
37.0
31.0
27.7
Current Expenditure as % of GDP
28.1
31.0
28.0
23.4
20.4
Investment Expenditure as % of GDP
4.2
3.7
3.6
3.0
3.3
Contributions & Other Expenses as % of GDP
2.8
3.6
3.1
4.5
4.0
Share of Oil Revenues in Total Revenues
57.6
46.3
50.1
52.7
57.0
Share of Non- Oil Revenues in Total Revenues
24.5
31.8
26.4
22.8
28.1
Share of Current Expenditure in Total Expenditure
72.0
69.9
75.7
75.7
73.7
*: Provisional
Source: Ministry of Finance and National Center for Statistics and Information.
PUBLIC FINANCE
53
Table 3.2 Public Finance (Rial Omani Million)
%
change
2022/21
%
change
2023/22
10588.7 8503.2 11195.0 14473.0 12542.0
29.3
-13.3
Net Oil Revenues
6098.5 3937.5 5613.0 7625.0 7150.0
35.8
-6.2
Gas Revenues
1900.5 1860.2 2629.0 3548.0 1868.0
35.0
-47.4
Other Current Revenues
2331.5 2087.1 2874.0 3248.0 3500.0
13.0
7.8
Capital Revenues
70.9
132.9
49.0
25.0
22.0
-49.0
-12.0
Capital Repayments
187.3
485.5
30.0
27.0
2.0
-10.0
-92.6
Items
REVENUES
2019
2020
2021
2022
2023*
TOTAL EXPENDITURE
13211.2 12925.7 12418.0 13329.0 11606.0
7.3
-12.9
Current Expenditure
9506.3 9034.5 9400.0 10092.0 8554.0
7.4
-15.2
Defence & National Security
3358.5 2834.8 2785.0 2928.0 2894.0
5.1
-1.2
Civil Ministries
4486.8 4580.6 4428.0 4449.0 4616.0
0.5
3.8
Public Debt Service
683.6
891.9
2.1
-3.0
Oil Production Expenditures
407.2
-
-
-
-
Gas Purchase &Transporting Expenditures
570.2
727.2
-
44.7
-
Investment Expenditure
1417.4 1079.7 1192.0 1306.0 1363.0
9.6
4.4
1324.9 1071.8 1192.0 1306.0 1363.0
9.6
4.4
83.1
-
-
-
-
-
-
9.4
7.9
-
-
-
-
-
780.0
0.0
0.0
-
-
Development Expenditure for Civil Ministries
Development Expenditure for Gov
Companies
Capital Expenditure for Civil Ministries
Oil &Gas Production Expenditure
1339.6 1761.1
1054.0 1076.0 1044.0
-
-
1133.0 1639.0
Conrtibutions and Other Expenses
Contributions in Domestic, Regional &
International Institutions
Development & Housing Loan Interests
Subsidy
Electricity Subsidy
947.9
1050.3 1046.0 1931.0 1689.0
84.6
-12.5
78.1
72.8
7.0
69.0
20.0
885.7
-71.0
36.9
31.1
38.0
33.0
42.0
-13.2
27.3
600.0
725.3
556.0
546.0
500.0
-1.8
-8.4
Oil Products Subsidy
39.9
23.1
39.0
730.0
370.0
-
-49.3
Food Commodities Subsidy
2.9
1.8
-
20.0
12.0
-
-40.0
Water Subsidy
-
-
95.0
75.0
91.0
-21.1
21.3
Waste Subsidy
-
-
79.0
55.0
66.0
-30.4
20.0
Debt Repayment Provision
-
-
150.0
200.0
400.0
33.3
100.0
Transport Sector Subsidy
-
-
0.0
115.0
100.0
-
-13.0
Sewage Sector Subsidy
-
-
-
86.0
67.0
-
-
Social Protection Net Subsidy
-
-
-
-
-
-
-
Other Sectors Subsidy
-
-
8.0
1.0
21.0
-87.5
-
936.0
SURPLUS/DEFICIT
-2622.5 -4422.5 -1223.0 1144.0
-193.5
-
FINANCING
2622.5 4422.5 1223.0 -1144.0 -936.0
-
-
Drawing from Reserves
400.0
500.0
400.0
-
-
Net Loans Received
1681.0 1222.7
921.0
-2083.0 -1983.0
-
-
Development Bonds(Net)
200.0
739.1
300.0
-82.0
-315.0
-
-
Net change in Government Accounts
341.5
1960.7
-398.0
1021.0 1362.0
-
-
-
-
*: Provisional
Source: Ministry of Finance.
54
CHAPTER III
Table 3.3
Breakdown of Other Current Revenues
(Rial Omani Million)
Items
2019
2020
2021
2022
2023*
%
change
2023/22
A. Taxes and Fees Revenue
1442.7
1199.2
1492.7
1839.8
2050.3
11.4
Income Tax on Companies and
Establishments
624.8
468.4
446.0
533.4
747.6
40.2
Fees on Licences and Others
583.5
545.1
859.3
1090.6
1086.9
-0.3
Custom Duties
234.4
185.7
187.4
215.8
215.8
0.0
B. Non-Tax Revenue
888.7
887.9
1381.5
1407.8
1449.7
3.0
Water Revenue
50.3
20.9
14.3
0.3
0.0
0.0
Airport Revenue
71.6
41.1
36.1
58.0
70.9
22.2
Port Revenue
0.9
0.7
0.5
0.6
0.9
50.0
Public Communication Services Toll
75.7
73.7
64.1
61.4
68.6
11.7
Surplus from Public Authorities
10.7
9.5
21.1
14.4
16.1
11.8
Rent from Government Real Estate
21.0
17.9
23.9
24.7
29.8
20.6
Income from Government Investments
260.6
237.5
833.2
812.5
805.4
-0.9
Interest on Bank Deposits and Lending
20.7
8.1
10.2
28.8
34.8
20.8
Passport and Immigration Fees
52.3
40.4
48.5
65.6
70.6
7.6
Miscellaneous Administrative Fees & Charges
55.9
50.1
66.6
72.1
73.2
1.5
Compensations, Fines & Forfeitures
125.0
123.9
97.6
103.5
106.7
3.1
Mining Revenue
10.8
7.4
7.0
10.0
9.6
-4.0
Miscellaneous Revenue
60.2
225.6
129.3
116.5
136.9
17.5
Others
73.0
31.1
29.1
39.4
26.2
-33.5
2331.5
2087.1
2874.0
3247.6
3500.0
7.8
Total
*: Provisional
Source: Ministry of Finance.
PUBLIC FINANCE
55
Table 3.4
Breakdown of Civil Current Expenditure by Type of Expenses
(Rial Omani Million)
Items
2019
2020
2021
2022
2023*
%
change
2023/22
A. Total Wages, Salaries, Allowances and
Others
3358.3
3488.4
3282.9
3402.4
3506.5
3.1
Salaries and Wages
1672.7
1809.7
1601.2
1616.2
1649.0
2.0
Allowances
1264.0
1352.4
1171.6
1182.0
1208.1
2.2
Other Remuneration
176.1
243.9
230.4
220.5
254.6
15.5
Contribution to Pension Fund
245.5
82.4
279.7
383.7
394.8
2.9
750.3
754.3
873.0
751.3
816.2
8.6
Purchase of Goods
212.3
237.3
277.2
210.9
221.3
4.9
Purchase of Services
427.7
400.9
436.4
415.4
421.7
1.5
Expenses of Government Services
105.6
108.9
140.9
114.8
124.9
8.8
Others
4.6
7.2
18.5
10.2
48.3
-
C. Subsidies and Other Current Transfers
378.2
337.9
259.9
270.2
268.7
-0.6
Total Civil Current Expenditure
4486.8
4580.6
4415.8
4423.9
4591.4
3.8
B. Expenditure on Goods and Services
*: Provisional
Source: Ministry of Finance.
Table 3.5
Government Debt Indicators
(Rial Omani Million)
Items
2019
2020
2021
2022
2023*
%
change
2023/22
1.Stock of Debt (R.O.Million)
17570.3
18755.5
20473.7
17601.6
15263.5
-13.3
2. Principal Repayments (R.O.Million)
327.3
1072.9
1729.0
4104.0
2675.0
-34.8
3. Interest Payments (R.O.Million)
683.6
891.9
1054.0
1076.0
1044.0
-3.0
(a) Debt to GDP ratio (%)
51.9
64.3
61.0
40.9
36.5
-10.8
(b) Debt Service ratio (%)***
4.1
12.0
12.7
17.7
13.0
-26.4
4. Debt Indicators **
*: Provisional
**Since non-government debt is not included in deriving these indicators, they do not reflect the debt of Oman as a whole, and hence,
they are strictly not comparable with standard published debt indicators for other countries.
*** Relating to external debt of the Government only. Debt- service ratio implies principal repayments plus interest payments as
percentage of export of goods and services.
Note:
1. Principal Repayments (item 2) and Interest Payments (item 3) have been augmented to represent external as well as domestic
outstanding debt.
2. The overall debt numbers may differ from the data published earlier due to inclusion of overdraft facility from CBO.
56
CHAPTER III
Table 3.6
Budget Estimates & Actuals (Rial Omani Million)
% change actual
2024
2023/ budget
Budget
2023
% Change
2024
budget/
2023 actual
Items
2023
Budget
2023
Actual
TOTAL REVENUES
10050.0
12542.0
24.8
11010.0
-12.2
Net Oil Revenues
5320.0
7150.0
34.4
5915.0
-17.3
Gas Revenues
1400.0
1868.0
33.4
1575.0
-15.7
Other Current Revenues
3280.0
3500.0
6.7
3455.0
-1.3
Capital Revenues
40.0
22.0
-45.0
55.0
150.0
Capital Repayments
10.0
2.0
-80.0
10.0
400.0
TOTAL EXPENDITURE
11350.0
11606.0
2.3
11650.0
0.4
Current Expenditure
8620.0
8554.0
-0.8
8573.0
3.1
Defence & National Security
3000.0
2894.0
-3.5
3070.0
6.1
Civil Ministries
4420.0
4616.0
4.4
4453.0
-3.5
Public Debt Service
1200.0
1044.0
-13.0
1050.0
0.6
Investment Expenditure
900.0
1363.0
51.4
900.0
-34.0
Conrtibutions and Other Expenses
1830.0
1689.0
-7.7
2177.0
28.9
Contributions in Domestic, Regional &
International Institutions
10.0
20.0
100.0
40.0
100.0
Development & Housing Loan Interests
Subsidy
23.0
42.0
82.6
55.0
31.0
Electricity Subsidy
485.0
500.0
3.1
460.0
-8.0
Oil Products Subsidy
39.0
370.0
848.7
35.0
-90.5
Food Commodities Subsidy
25.0
12.0
-52.0
25.0
108.3
Water and Sewage Sector Subsidy
135.0
158.0
17.0
184.0
16.5
Waste Sector Subsidy
45.0
66.0
46.7
59.0
-10.6
Future Debt Obligations
400.0
400.0
0.0
400.0
0.0
Transport Sector Subsidy
84.0
100.0
19.0
84.0
-16.0
Social Security Scheme Subsidy
384.0
-
-
560.0
-
Projects with a Developmental Impact
200.0
67.0
-66.5
240.0
-
-
21.0
-
35.0
66.7
SURPLUS/DEFICIT
-1300.0
936.0
-172.0
-640.0
-
FINANCING
1300.0
-936.0
640.0
-
Drawing from Reserves
400.0
0.0
400.0
-
Net Loans Received
913.0
-1983.0
254.0
-
Development Bonds (Net)
-13.0
-315.0
-14.0
-
-
1362.0
0.0
-
Other Sectors Subsidy
Net Change in Government Accounts
Source: Ministry of Finance
PUBLIC FINANCE
57
CHAPTER
MONEY, BANKING,
AND FINANCIAL INSTITUTIONS
ANNUAL REPORT
The banking sector in the Sultanate of
Oman continued to demonstrate improved
financial performance and resilience during
2023. The resilience of the banking sector was
underpinned by adequate capitalization,
sufficient liquidity buffers, and robust
risk management practices. The sector
continued to be profitable, demonstrating
financial sustainability.
In 2023, global financial conditions tightened
significantly, mainly due to persistent
inflationary pressures. Although inflation
moderated somewhat from its peak in 2022
in many countries, it remained elevated. This
prompted several central banks to maintain
a tight monetary policy stance, with some
continuing to raise their policy rates. The US
Federal Reserve implemented several rate
hikes in the first half of 2023.
Operating within a fixed exchange rate
regime, the CBO continued to align its
monetary policy with that of the US Federal
Reserve. However, in our assessment we
did not observe any significant impact of
monetary tightening on borrowing costs
and, subsequently, on economic activity
in Oman. Throughout the year, the CBO
focused on ensuring sufficient liquidity
in the banking sector. This enabled the
banking sector to continue performing
its intermediation function effectively. It is
worth noting that the exchange rate peg
continues to provide a credible nominal
anchor for Oman, reducing uncertainty and
contributing to maintaining low and stable
inflation in the country.
Overall, the banking and financial sector
continued to provide critical support to
Oman’s economic growth while preserving
financial stability. A thorough evaluation
and assessment of monetary, banking, and
financial institutions is undertaken in the
following sections.
Monetary and Banking Indicators
The banking sector remained safe and
sound. Its growth significantly contributed
to the Omani economy. The CBO’s
60
balance sheet contracted by 0.4 percent
during 2023 primarily influenced by shifts in
foreign deposits from the government and
banks, as well as the sale of USD currency
to local banks. Within the same year,
banking indicators showed slight growth.
The banking sector’s total assets increased
by 7.8 percent during the year, reaching
OMR 41.8 billion at the end of 2023. Bank
credit rose by 4.3 percent to OMR 30.5
billion- mainly directed to the private sector,
while total deposits grew by 12.3 percent
over the year. Additionally, banks’ capital
adequacy ratio (CAR) remained well above
regulatory requirements of 13.5 percent
albeit its decline from 19.7 percent in 2022 to
18.9 percent at the end of 2023. Moreover,
banks sustained a robust liquidity position
with a liquidity coverage ratio (LCR) of 221.8
percent and a net stable funding ratio
(NFSR) of 120.3 percent, both significantly
surpassing the minimum required threshold
of 100 percent, thereby demonstrating their
effective liquidity risk management. Banks
also showed considerable resilience when
subjected to a set of stringent hypothetical
liquidity shocks under the CBO’s stress testing
exercise, affirming ability of the banking
sector to navigate any challenges (for details
see Section 3 of Financial Stability Report –
2024). The banks were also able to maintain
the quality of their assets with a reasonable
delinquency rate. The gross non-performing
loans (NPLs) stood at 4.5 percent at the end
of December 2023, indicating strong asset
quality. Net NPLs remained unchanged over
the year at 1.4 percent.
In terms of financial deepening, the ratio of
bank credit to nominal non-oil GDP increased
from 105.6 percent in 2022 to 108.2 percent
in 2023, while the ratio of bank deposits to
non-oil GDP increased from 93.6 percent to
103.4 percent over the same period (Chart 4.1 a).
CHAPTER IV
Chart 4.1 (a): Income Velocity & Money multiplier
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2019
2020
2021
Income Velocity of M2
2022
2023
Money Multiplier for M2
Monetary Aggregates
Monetary aggregates continued to expand
reasonably during 2023. Credit extended
during the year increased by 4.3 percent and
was supported by robust growth in deposits
of 12.3 percent. Reserve money (monetary
base) expanded by 1.0 percent, mainly
due to a 3.9 percent increase in banks’
deposits (in the form of clearing balances)
held with the CBO, amounting to OMR
1.3 billion by the end of December 2023.
Likewise, currency in circulation witnessed
decline during the year, however it was less
pronounced at 2.7 percent. Broad money
(M2) increased by 13.1 percent over the
year, driven by growth in both quasi-money
and narrow money. Within broad money,
narrow money (M1) rose by 6.7 percent, as
demand deposits increased by 9.4 percent,
despite 2.7 percent decline in currency held
by the public. Quasi money grew by 15.5
percent, with an increase in time deposits in
local currency by 12.7 percent and foreign
currency deposits by 77.3 percent during
2023. Additionally, income velocity of broad
money decreased from 2.1 in 2022 to 1.8 in
2023 (Chart 4.1 b & c).
Chart 4.1(b): Broad Money & Bank Credit to Non-Hydrocarbon GDP Ratio
160
140
120
100
80
60
2019
2020
2021
Bank credit to Non-Hydrocarbon GDP
MONEY, BANKING AND FINANCIAL INSTITUTIONS
2022
2023
Broad Money to Non-Hydrocarbon GDP
61
Chart 4.1 (c): Currency & Deposit Ratios
40
30
20
10
0
2019
Currency as % of M2
2020
2021
2022
OMR Demand Deposits as % of M2
2023
OMR Time Deposits as % of M2
Monetary Survey
The expansion of Money Supply (M2) was
supported by a 35.4 percent increase in net
foreign assets of the banking sector, along
with 6.6 percent growth in domestic assets.
The domestic source of money supply was
bolstered by banks’ net claims on public
enterprises, which grew by 10.4 percent,
and on the government, which grew by
7.6 percent (see Table 4.4). Despite the
CBO’s net foreign assets remaining nearly
unchanged, the net foreign assets (NFA) of
other depository corporations (ODCs) saw
a significant increase shifting from negative
OMR 1,439.5 million to a positive balance of
OMR 195.7 million. This marks the first time
since 2014 that the NFA has achieved a
positive balance.
CBO’s Monetary Policy
Under the fixed exchange rate regime and
an open capital account, the CBO has
limited scope to pursue an independent
monetary policy. Nonetheless, the CBO can
62
deploy a number of instruments, including
liquidity facility and prudential norms, to
foster financial stability and economic
growth. The CBO sets its policy rate (repo
rate) by aligning it with the upper limit of the
US target federal funds rate (TFFR), adding
an extra 50 basis points as risk premium to
account for the varying risk profiles of the
two economies. The CBO also ensures
bringing about the target liquidity change
by absorbing and/or injecting liquidity from
time to time depending on the situation
through various instruments – including repoat its disposal.
In response to persistent inflationary
pressures, major central banks continued
their tightening measures in 2023, aiming
to bring inflation closer to their targets. The
Federal Reserve implemented further hikes
during the year, with the Federal Funds
Rate reaching 5.2 5percent-5.5 0percent by
July 2023 and remaining unchanged since
then. Similarly, the CBO raised its policy rate,
reaching 6.0 percent by the end of July 2023.
CHAPTER IV
Money Market
CBO repo rate of 6.0 percent, the money
market rates in Oman increased during the
year with overnight inter-bank rate reaching
5.417 percent by December 2023 from 4.271
percent in 2022 (Chart 4.2). Despite that,
the inter-bank activity (borrowing & lending)
of conventional banks increased to some
extent from an average of OMR 38.7 million
during 2022 to OMR 40.3 million in 2023.
There was a reduction in the utilization of
the CBO liquidity facilities. The total value
of repos, representing secured borrowing
by banks from CBO decreased by 51.1
percent to OMR 1,424.8 million in 2023 from
OMR 2,948.5 million in 2022. Moreover, the
total value of treasury bills issued decreased
to OMR 1,689.4 million in 2023 from OMR
4,007.7 million in 2022 (Table 4.5). Apart from
meeting the government’s demand for
short-term funding, treasury bills facilitate the
The money market is a key segment in
banking intermediation and the transmission
of monetary policy. Aggregate liquidity in
the banking system is managed by the CBO
through use of indirect instruments such as
repurchase agreements (repos) and other
standing facilities for liquidity injection and
certificates of deposit. Liquidity gap for
short-term maturities is, therefore, managed
by the CBO and short-term interest rates are
influenced accordingly, as per monetary
policy stance. Domestic monetary conditions
in Oman broadly reflect those prevailing in the
USA due to the currency peg framework and
an open capital account. The CBO provides
liquidity to banks through repo operations at
the repo rate, which is linked to the target
federal funds rate. Interest rates of money
market in Oman are thus not fully controlled
by CBO and move synchronously with
those prevailing in the US. Given the current
federal funds rate of 5.25-5.50 percent and
development of money market by providing
suitable benchmarks.
Chart 4.2: Overnight Inter-bank Rate and Effective Federal Funds Rate (EFFR)
7
6
5
4
3
2
1
MONEY, BANKING AND FINANCIAL INSTITUTIONS
Overnight Rate
23
3
D
ec
-
-2
3
ov
-2
N
ct
O
Se
p-
23
3
3
-2
l-2
ug
A
Ju
23
n-
3
-2
Ju
3
-2
ay
M
pr
3
EFFR
A
-2
ar
23
b-
M
Fe
Ja
n-
23
0
Repo Rate
63
Capital Market
Foreign Exchange Market
The capital market plays a pivotal role in
financing activities and efficient allocation
of resources and in turn, contributes to
economic growth. It provides an alternative
avenue of financing where direct interface
between capital providers and seekers
allows the availability of debt and equity
capital.
Considering
its
importance,
continuous policy efforts are being made by
the Financial Services Authority (regulator)
and the government to further develop and
broaden the capital market in the Sultanate.
While the equity segment is fairly developed,
the debt segment also made some progress
in the last few years with regular issuance of
government development bonds (GDBs) to
finance the fiscal deficit. The regular issuance
of GDBs would further aid the development
of the debt market by providing a risk-free
yield curve for benchmarking and pricing.
Furthermore, economic diversification will
drive the capital market’s development by
generating demand for alternative financing
sources.
In May 2023 there was a single GBD issuance
worth OMR 57.5 million of bonds with 5
years tenor. By the end of 2023, the total
outstanding amount of GDBs stood at OMR
2,517.5 million, of which OMR 1,432.2 million
of bonds were held with commercial and
specialized banks. The holding pattern of
GDBs at the end of 2023 showed that banks
held the highest share of 57.0 percent,
followed by pension funds with 34.5 percent
share (Table 4.6 (a)).
Table 4.6 (b) shows a decline in equity
share prices as the MSX-30 index fell by 7.1
percent in 2023. At the same time, market
capitalization slightly increased by 0.3
percent during 2023 reaching OMR 23.8
billion by the end of the year.
The reliance of the Sultanate’s economy
predominantly on a single source of
revenue, oil exports which are denominated
in the USD, is best fitting with a fixed
exchange rate system. Oman’s currency is
therefore pegged with the US dollar which
helps protect the economy from exchange
rate risks. Furthermore, since the pegged
exchange rate is acting as a credible
nominal anchor for attaining all the intended
objectives
including
macroeconomic
stability, it remains an overriding objective
for the CBO to protect and sustain. The
government remained the main supplier
of foreign currency to the Central Bank,
whilst commercial banks remained as the
main buyers. A total of USD 17.3 billion was
purchased by CBO from the Ministry of
Finance and other government entities in
2023, whereas sale of US dollars by CBO to
banks amounted to USD 17.6 billion.
64
Interest Rate Structure and Developments
Interest rates in Oman closely mirror those
prevailing in the US, owing to the fixed
exchange rate system and an open capital
account. Although the CBO has limited
capacity to implement an independent
monetary policy, it conducts liquidity
management operations using tools such
as repurchase agreements (repos) to
ensure adequate liquidity in the system
and alignment of the overnight inter-bank
rate to the desired target. These measures
are designed to maintain sufficient liquidity
in the system and align the overnight interbank rate with the Federal Funds Rate.
The CBO raised its repo rate to 6.0 percent
following the increase in U.S Fed policy
rate. Accordingly, the average inter-bank
CHAPTER IV
CBO has issued the regulatory framework
of cyber security and resilience with an
aim to enhance the resilience of licensed
institutions in managing cybersecurityrelated risks. Other regulatory and supervisory
initiatives were undertaken during 2023 such
as the new advanced national Real Time
Gross Settlement System (RTGS)which was
launched recently to facilitate broader
integration and digitalization of payment
systems. Oman is also advancing an
enhanced strategy for Combating Money
laundering and terrorism Financing (AML/
CFT). The rise of transnational financial crimes
has elevated the importance of the CBO’s
efforts in building domestic resilience.
With regards to fintech landscape in Oman
and central bank digital currency (CBDC), the
CBO has a Fintech Vision aimed at creating
a dynamic digital financial ecosystem that
fosters financial innovation. Thus, providing
sustainable support to competitive and
diversified economic sectors in Oman
through innovation. Its ultimate goal is
to facilitate new enablers and related
regulatory frameworks to address market
needs and developments. Moreover,
efforts are being made to enhance climate
resilience and manage climate-related risks
within the financial sector and aiding the
transition to a greener economy in line with
national policies and strategies.
The CBO has actively promoted digital
payments to transition from cash to cashless
transactions. In 2023, the CBO granted final
licensing approval to 6 payment service
providers (PSPs) and issued initial approvals
for 5 additional PSPs. Furthermore, the
CBO issued guidelines and instructions for
Regulatory and Supervisory Developments
banks and PSPs to offer card tokenization
CBO has adopted regulatory and supervisory services for debit, credit, and prepaid cards,
frameworks in line with global best practices enabling customers to register payment
to ensure healthy growth in the banking cards and use applications like Apple Pay
sector while maintaining financial stability. and Samsung Pay in Oman.
overnight rate in 2023 increased to 5.255
percent from 2.000 percent in 2022. The
weighted average interest rate on total
deposits (Rial Omani plus foreign currency
deposits), which stood at 2.065 percent in
December 2022, increased to 2.722 percent
as at end of December 2023.
Lending rates (Rial Omani plus foreign
currency), witnessed a slight increase from
5.640 in 2022 to 5.758 in 2023. The interest
rates on lending in local currency increased
from an average of 5.379 percent to 5.514
percent, while the rate on foreign currency
lending increased from 6.926 percent in
December 2022 to 7.512 percent in 2023.
The interest rate spread between local
currency lending and deposits decreased
from 3.386 percent in December 2022 to
2.878 percent in December 2023 (Table
4.7a). An analysis of the distribution pattern
of total Omani Rial deposits held with
conventional banks at the end of December
2023 revealed that 50.3 percent of these
deposits earned interest rates of 2.0 percent
or less per annum (Table 4.7b). With regard
to Omani Rial time deposits outstanding, it
was seen that 54.1 percent of deposits held
in banks earned a return of 5.0-6.0 percent
as at end-December 2023 compared to 19.1
percent a year ago, showing an increase of
35.0 percentage points over the year (Table
4.7c). As for interest rates on Omani Rial
lending, the majority (57.1 percent) of loans
were distributed between 5.0 percent to 7.0
percent as at the end of December 2023
largely consisting of personal loans (Table
4.7d).
MONEY, BANKING AND FINANCIAL INSTITUTIONS
65
Central Bank Operations
Total assets of CBO remained relatively
stable throughout 2023, experiencing a
slight decrease of 0.4 percent compared to
the previous year, a notable development
compared to previous year’s decline of 12.7
percent. The foreign assets which constituted
a significant portion of total assets at 95
percent, witnessed a negligible decline
of 0.6 percent during 2023 as compared
to a sharper decline of 10.7 percent in the
previous year. In particular, CBO’s holdings of
gold bullion reached OMR 77.3 million in 2023
increasing by 61.4 percent during the year.
While securities decreased by 2.1 percent
in 2023 after the increase of 11.8 percent
witnessed in 2022. CBO’s placements abroad
in 2023 remained roughly at par with 2022
levels (Table 4.8a).
On the liabilities front, deposits of banks
with CBO increased by 15.2 percent in
2023 whereas it decreased by 28.2 percent
in 2022. The deposits (both in OMR and
foreign currency) placed by banks and
other institutions with CBO were mainly for
meeting reserve requirements and clearing
purposes. CBO’s liabilities to the government
decreased by 28.7 percent and 4.3 percent
in 2023 and 2022 respectively, reflecting lower
government deposits with CBO. Similarly,
currency issued witnessed an annual decline
of 1.4 and 6.1 percent in 2023 and 2022,
respectively. The paid-up capital of CBO
at the end of 2023 stood at OMR 1 billion,
while the general reserves amounted to
OMR 555.3 million, which were equivalent to
35.0 percent of the currency in circulation at
the end of December 2023. The net worth of
CBO registered an increase of 14.8 percent in
2023 as against the decrease of 11.8 percent
observed in 2022; due to the appreciation in
the financial assets’ valuation adjustment
account (available-for-sale investments).
Foreign liabilities of CBO witnessed a decline
of 5.8 percent and 8.9 percent in 2023 and
2022, respectively. In net terms, foreign assets
66
of CBO did not change compared to last
year.
Commercial Banks’ Operations and Performance
The performance details of commercial
banks in Oman are presented in the
combined balance sheet of Other Depository
Corporations (ODCs), which combines the
balance sheets of conventional banks and
Islamic banks and windows catering to a
major part of the financial intermediation
(Table 4.9). This data offers a comprehensive
overview of financial intermediation within
the Omani economy. The balance sheet
size of ODCs increased significantly by
7.8 percent in 2023 compared with the
negligible growth of 0.8 percent in 2022
(Table 4.9). Among the assets, the total
credit increased by 4.3 percent during 2023
compared to 4.8 percent in 2022. The private
sector credit experienced a growth of 4.7
percent compared to 4.1 percent in 2022,
continued to account for the largest share
(83.9 percent) in total credit. Furthermore,
investments registered an increase of 15
percent in 2023 compared to a drop of 9.2
percent in 2022.
Among the liabilities, deposits with ODCs grew
considerably by 12.3 percent compared to
1.1 percent in 2022. Private sector deposits
constituted the largest share in total
deposits comprising 66.0 percent, followed
by government deposits at 22.6 percent.
Further analysis of sector-wise distribution
revealed that the household sector and nonfinancial corporations received a share of
about 49.3 percent and 32.4 percent in 2023,
respectively, to total private sector deposits
(Charts 4.3 a & b). ODCs net profits increased
by 10.3 percent to OMR 441.5 million in 2023.
Other income decreased by 13.8 percent
during the year, however, foreign exchange
earnings increased by 17.0 percent in
2023. Further, the operating expenses and
provisions for non-performing assets declined
by 6.2 percent and 10.7 percent during 2023.
CHAPTER IV
Chart 4.3 (a): Share of Private Sector Deposits (December 2023)
2.86%
Others
15.43%
Financial
Corporations
49.29% Households
32.42%
Non-Financial
Corporations
Chart 4.3 (b): Share of Private Sector Credit (December 2023)
6.21%
3.82%
Others
Financial
Corporations
44.74%
Non-Financial
Corporations
MONEY, BANKING AND FINANCIAL INSTITUTIONS
45.23% Households
67
Balance Sheet of Conventional Banks
The balance sheet size of conventional
banks accounted for 83.7 percent of
ODC’s assets in 2023. Total assets increased
significantly by 6.7 percent in 2023
compared to a slight decline of 0.6 percent
in 2022 (table 4.10a). Moreover, total credit
extended by conventional banks witnessed
a growth of 2.5 percent in 2023 particularly
benefiting private sector and the public
enterprises, which witnessed an increase of
2.9 percent and 10.1 percent, respectively.
Additionally,
credit
to
non-residents
increased by 14.3 percent. Conventional
banks’ overall investment in securities
registered an increase of 16.6 percent as
against a decrease of 11.5 percent during
2022, mainly driven by 98 percent increase
in foreign securities. On the liabilities side,
total deposits held with conventional banks
increased by 12.2 percent in 2023, of which,
government deposits and deposits of public
enterprises observed a growth of 2.5 percent
and 57.8 percent, respectively, while private
sector deposits which remained as a major
contributor to deposits with conventional
banks, increased by 9.5 percent in 2023.
Non-residents deposits also increased by 63
percent in 2023.
An analysis of the sources of funds, given
in table 4.10b, indicates that deposits
expanded across most sectors during 2023.
Private sector deposits accelerated by OMR
1,356 million in 2023, moreover deposits
of public enterprises increased by OMR
822 million during the year. Conventional
banks reduced their dependence on new
borrowings from banks abroad by OMR
138.8 million as a funding source. The
incremental use of funds for credit witnessed
68
an expansion of OMR 602.5 million in 2023,
of which, credit to the private sector and
public enterprises increased by OMR 330.5
million and OMR 571.5 million during 2023
compared to previous year. The incremental
use of funds for investments and placement
abroad increased substantially by OMR
712.3 million and OMR 480.9 million in 2023.
Furthermore, the details of non-resident
assets and liabilities, furnished in Table 4.10c,
indicate that, foreign assets increased
by OMR 1,440.4 million mainly due to the
increase in investment in foreign securities
and due from banks abroad. On the other
hand, foreign liabilities decreased by OMR
280.6 million primarily due to a decrease in
long term bond obligations.
Balance Sheet of Islamic Banks and Windows
The Islamic banking sector consists of two fullfledged Islamic banks and Islamic windows
of five domestic banks. This segment has
been witnessing a consistent increase in
its contribution to financial intermediation
in the Sultanate of Oman (Table 4.11).
Islamic banking entities (IBEs) continued to
grow at a healthy pace since the launch
of their operations in 2013. Total assets of
IBEs increased by 14.6 percent in 2023 over
and above the growth rate of 8.7 percent
observed last year. Total financing and
investments increased by 11.9 percent and
3.2 percent, respectively, in 2023. On the
liabilities side, total deposits and capital
and reserves grew by 12.9 percent and 11.3
percent in 2023. The share of IBEs in the total
assets of the banking sector increased from
16.5 percent in 2022 to 17.6 percent in 2023.
CHAPTER IV
Sectoral Flow of Banking Sector Credit
The personal loans category, holding a
dominant 37.5 percent share of total credit,
witnessed a growth rate of 4.5 percent in
2023 up from 3.7 percent in the previous
year. Several other sectors also registered
positive growth rates during the year,
highlighting the banking sector supportive
role in promoting economic diversification
by meeting the credit needs of all segments
in the economy. Credit to Transport and
Communication sector experienced an
increase in its share of total credit to 7.2
percent in 2023, up from 5.9 percent in
2022. This sector recorded a credit growth
of 27.1 percent in 2023 compared to the
9.4 percent increase in the previous year.
Similarly, lending to Mining and Quarrying
sector expanded by 12.8 percent while
lending for Import Trade increased by 14.4
percent. Credit to the manufacturing sector
and wholesale & retail trade sector grew by
2.9 percent and 4.6 percent, respectively in
2023, in contrast to 2022 when these sectors
recorded declines of 3.1 percent and 2.4
percent, respectively. On the other hand, the
services sector accounted for 6.8 percent
share of total credit in 2023, down from 10.1
percent in the previous year, showing a 29.0
percent decline credit compared to the
2.3 percent increase registered last year.
Meanwhile, the construction sector made
up to 9.0 percent of total credit in 2023. This
sector experienced a marginal drop of 0.4
percent in bank credit balance during the
year (Chart 4.4).
Specialized Banks
There are two specialized banks in Oman
owned by the Government, namely Oman
Housing Bank (OHB) and Development
Bank (DB). The principal activity of OHB is
to provide soft housing loans to different
segments of the Omani society. Total
outstanding mortgage loans extended
by OHB increased by 11.1 percent during
2023 to reach OMR 769.9 million as at endDecember 2023. The shareholders’ equity
stood at OMR 336.5 million at end-December
2023 compared to OMR 320.7 million a year
ago, showing a growth of 4.9 percent.
DB supports the growth process of the
Chart 4.4: Sectoral Distribution of Banks Credit (December 2023)
Personal Loans
Other
11.9%
Construction
Services
37.5%
Manufacturing
Mining and
Quarrying
Financial
Institutions
5.8%
9%
Sectoral
Distribution of
Banking
Sector Credit
December
2023
6.8%
8.2%
Transport &
Communication
Wholesale &
Retail Trade
Electricity, gas
and water
MONEY, BANKING AND FINANCIAL INSTITUTIONS
3.8%
4.3%
7.2%
5.4%
69
Omani economy by providing loans for
development projects/sectors, including
agriculture, fisheries, tourism, education,
and health. Additionally, DB provides loans
to small businesses helping to add value
and generate job opportunities. At the end
of December 2023, loans and advances
extended by DB at OMR 203.0 million were
higher by 30.8 percent than a year ago.
The total shareholders’ equity stood at OMR
171.7 million at the end of December 2023,
showing an increase of 1.7 percent from the
previous year (Statistical Appendix T8 and
T9).
Finance and Leasing Companies
There are five Finance and Leasing
companies (FLCs) operating in the Sultanate
of Oman with a network of 39 branches. The
total assets of FLCs increased by 10.4 percent
in 2023 compared to the previous year (Table
4.14). The cash and bank balances held by
FLCs declined marginally by 1.2 percent in
2023. The gross non-performing loans of FLCs
increased by 7.8 percent in 2023, while the
ratio of gross non-performing loans to total
loans/ lease portfolio decreased to 18.0
percent at end-December 2023 from 19.1
percent a year ago, primarily reflecting the
increase in the denominator (loans/lease
portfolio). The FLCs continued to depend
largely on borrowings from banks and other
financial institutions for their funding needs,
which financed 58.7 percent of their total
70
assets as at end-December 2023. The net
profit of FLCs after provisions and taxes
showed an improvement of 13.9 percent
during 2023.
Money Exchange Companies
There are two types of institutions engaging
in money exchange business in Oman – those
involved in foreign currency exchange and
cross-border money transfers, and those
engaged specifically in foreign currency
exchange. As at end-December 2023, there
were 15 licensed exchange establishments
offering foreign currency exchange and
cross-border money transfers with 461
branches spread over Oman, in addition to
28 foreign currency changing firms.
The operations of Money Exchange
Establishments are periodically reviewed by
the CBO to ensure compliance with extant
rules. Total net assets of the 15 exchange
establishments amounted to OMR 96.7
million in 2023 showing a decrease of 6.9
percent over the previous year. Out of these
assets, OMR 45.6 million were maintained
as net balances with banks and OMR 25.7
million as cash in hand. Together they
represented liquid assets of OMR 71.3 million
constituting 73.8 percent of total net assets.
The total capital, reserves and earnings of
these companies stood at OMR 71.8 million
as at the end-December 2023, higher by 2.2
percent over their value a year ago.
CHAPTER IV
Box 4.1: Dollarization of the Banking System in Oman
Dollarization, where residents prefer
holding foreign currency over the
domestic currency for transactions
or saving purposes, often arises from
factors such as macroeconomic
instability, lack of confidence in
the local currency from recurrent
devaluations, high inflation rates or
political uncertainty and increased
volatility in global financial markets
that encourages deposit dollarization
and flight-to-safety (Levy-Yeyati &
Sturzenegger, 2003).
Investigating
the role of these factors in a country
like Oman, with a pegged exchange
rate regime to the US dollar, is vital
for understanding the dynamics that
drive the behavior and preferences
of economic agents towards foreign
currency which have implications on
the resilience of the pegged exchange
rate , monetary policy ineffectiveness,
inflation dynamics, and financial
stability risk.
The literature on dollarization mostly
1
discusses two aspects (i) currency
substitution, i.e., the use of foreign
currency holdings as a means of
payment; and (ii) asset substitution, i.e.,
the use of foreign currency instruments
for foreign investment purposes. In
broad sense, these two aspects could
refer to deposit and loan dollarization.
The minimum variance portfolio
allocation (MVP) model of Ize and Levy
Yeyati (2003) reveals that if expected
inflation volatility is greater than real
exchange rate (expected) volatility,
then investors would prefer to hold
less risky dollar deposits. Honig (2009)
reports that a fixed exchange rate
regime may encourage more loan
dollarization due to borrowers’ belief
that their currency exposure is hedged.
Urosevic and Rajkovic (2017) propose
that interest rate differentials are an
important determinant of dollarization
in the short run when the uncovered
interest rate parity condition (UIP) does
not hold.
Relatively underdeveloped domestic financial markets could possibly also prompt residents to use and hold savings in foreign
currency owing to limited opportunities to diversify risk. Anecdotal evidence suggests that incentives to hold foreign currency
deposits for precautionary reasons diminish as financial markets deepen.
2
The exchange rate parity of the Omani Rial (OMR) with the US dollar (USD) has remained unchanged at USD 2.6008 per OMR
since 1986.
3
Ize and Levy Yeyati (2003) derive the MVP allocation model between local and foreign currency deposits. Their model
postulates that risk-averse resident investors choose their portfolio -based on volatility of inflation expectations and exchange
rates- to optimize their risk/return profile in terms of their local consumption basket.
MONEY, BANKING AND FINANCIAL INSTITUTIONS
71
Stylized facts about Dollarization in Oman
Deposit and loan dollarization in Oman are not significant and has remained relatively
stable over the period 2011-2023 with deposit dollarization averaging 12.8 percent
and loan dollarization averaging 15.9 percent during this period (Chart 4.1.1).
Chart 4.1.1: Evolution of Dollarization in Oman
25
20
% share
15
10
5
Jan-23
Sep-23
May-23
Jan-22
Sep-22
May-22
Jan-21
Sep-21
May-21
Jan-20
Sep-20
May-20
Jan-19
Sep-19
May-19
Jan-18
Sep-18
May-18
Jan-17
Sep-17
May-17
Jan-16
Sep-16
May-16
Jan-15
Sep-15
May-15
Jan-14
Sep-14
May-14
Jan-13
Sep-13
May-13
Jan-12
Sep-12
Sep-11
May-12
May-11
Jan-11
0
Source: Central Bank of Oman
Deposit dollarization
Loans dollarization
The data appear to indicate that dollarization does have a negative association with
interest rate differentials – the foreign currency minus local currency rate – which can
incentivize deposit dollarization (Chart 4.1.2). The interest rate differential between
interbank borrowing and the effective federal funds rate, however, does not seem
have a clear relationship with dollarization in Oman. Nevertheless, a tighter monetary
policy should reduce deposit dollarization and increase loan dollarization in Oman, as
monetary policy transmission takes place beyond money market
Chart 4.1.2: Interest Rate DIfferentials of Deposits, Loans and Interbank Borrowing
3.0
2.0
Interest rate differential of FCY-OMR deposits
2.0
1.5
Interest rate differential of FCY-OMR loans
Interest rate differential between interbank borrowing & effective Fed fund rate (rhs)
1.0
Percentage points
-1.0
0.5
-2.0
0.0
Percentage points
1.0
0.0
-3.0
-0.5
-4.0
-5.0
Sep-23
May-23
Jan-23
Jan-22
Sep-22
May-22
Jan-21
Sep-21
May-21
Sep-20
May-20
Jan-20
Jan-19
Sep-19
May-19
Sep-18
May-18
Jan-18
Sep-17
May-17
Jan-17
Sep-16
May-16
Jan-16
Sep-15
May-15
Jan-15
Sep-14
May-14
Jan-14
Sep-13
May-13
Jan-13
Sep-12
Jan-12
Sep-11
May-12
Jan-11
May-11
-1.0
Source: Central Bank of Oman
Among other factors, level of fx reserves appear to be negatively associated
with deposit dollarization (Chart 4.1.3). De-dollarization of government debt and
concerted efforts by the government to develop local currency debt markets
should also help contain deposit dollarization in Oman by enabling domestic savers
to diversify their investments.
Chart 4.1.3: Central Bank Foreign Reserves and Government External Debt
10,000
90
9,000
80
8,000
70
7,000
60
50
5,000
40
4,000
30
3,000
% share
OMR million
6,000
20
2,000
10
1,000
0
Sep-23
May-23
Jan-23
Sep-22
May-22
Jan-22
Jan-21
Sep-21
May-21
Sep-20
May-20
Jan-20
Sep-19
May-19
Jan-19
Sep-18
May-18
Jan-18
Sep-17
May-17
Jan-17
Jan-16
Sep-16
May-16
Sep-15
May-15
Jan-15
Sep-14
May-14
Jan-14
Sep-13
May-13
Jan-13
Sep-12
Jan-12
Sep-11
May-12
May-11
Jan-11
0
Source: Central Bank of Oman
Gross fx reserves at CBO
72
Government external debt to total debt (rhs)
CHAPTER IV
Empirical Exercise
An
econometric
exercise
was
undertaken using monthly data from
January 2011 to December 2023 to
further examine the factors influencing
deposit and loan dollarization in Oman.
We used a standard recursive VAR
framework with Cholesky decomposition
that included variables based on the
existing literature i.e., net foreign assets
of the Central Bank of Oman (CBONFA),
domestic government debt (DGD),
deposit interest rate differential (private
foreign currency FCY deposits minus
private OMR deposits (IRDD)), loan
interest rate differential i.e. private FCY
loans rate – minus private OMR loans rate
(irdl) , and the real effective exchange
rate (REER). Deposit dollarization (DD) is
measured as a ratio of foreign currency
deposits of private sector in terms of total
deposits of private sector in the banking
system, while loan dollarization (DL) is
measured as a ratio of private sector
foreign currency loans to total private
sector loans in the banking system.
The monthly VAR model is estimated
with twelve lags. The relevant tests for
significance suggested that the model
was free from autocorrelation and
heteroscedasticity.
The impulse response functions provided
in (Chart 4.1.4) suggest that forex
reserves have a negative impact on
deposit dollarization in a significant and
sustained manner, while the impact on
loan dollarization was positive implying
that with increase in forex reserves
deposit dollarization would decline
while loan dollarization should witness
an increase. Increase in government
domestic debt was also seen leading a
significant and sustained decline in dollar
dollarization of the Omani economy,
while its impact on loan dollarization was
relatively insignificant. As expected, the
deposit rate differential (foreign interest
minus domestic interest) showed a
positive association with dollar and loan
dollarization during the sample period.
The impact of loan rate differential was
muted on both deposits and loans.
The behavior of deposit dollarization
reflects the uncovered interest rate
parity (UIP) condition. However, in
view of the regulatory interest rate
ceiling imposed on personal loans, the
transmission of policy rate shocks to
private sector loan rates is diminished.
The influence of a real exchange rate
shock (an appreciation of the REER) on
deposit dollarization was negative and
significant in the immediate period,
subsiding subsequently. The impact of
loan dollarization was negative, and
the impact remained over a sustained
period.
Given the pegged exchange rate regime in Oman, the domestic policy rate closely mirrors the US Fed fund rate. In lieu of this,
we incorporate two measures for interest rate differentials into the model, one that represents the asset side of banks’ balance
sheet and another the liability side. Thus, a higher interest rate differential signifies a relatively tighter domestic monetary policy
stance or widening in key policy interest rate vis-à-vis Fed policy rate to circumvent a shift out of Omani Rial during periods of
uncertainty. It may also be construed as weaker passthrough from policy rate to retail rates.
5
The CPI (base=2010) and the NEER were sourced from the International Financial Statistics (IFS) database of the International
Monetary Fund (IMF). The real effective exchange rate (REER) for Oman was constructed using relative prices for Oman and its
main trading partners.
6
While some lag length information criteria suggested lower lags for the VAR model, we opted for longer lag length specification
to mitigate against the possibility of omitting delayed effects in our monthly series model.
4
MONEY, BANKING AND FINANCIAL INSTITUTIONS
73
Chart 4.1.4 – Response of Deposit and Loan Dollarization to Shocks in
the Banking System of Oman
Conclusion and Policy Recommendation
The findings of the empirical exercise
suggest the importance of government
taking recourse of domestic debt market
for meeting its funding requirement.
Apart from lower dollarization of
deposits, it would also help developing
the domestic debt markets that would
have long-term benefits for the Omani
economy. The lower dollarization could
also help in improving the transmission
of monetary policy, and strengthening
74
financial stability. The increase in forex
reserves of CBO boosts the public
confidence in the domestic currency
which may contribute to resilience of
the economy. Future research is crucial
to examine how dollarization impacts
banks’ balance sheets, exchange rate
risk exposure, and overall financial
stability, which are important to better
inform regulatory and supervisory
frameworks.
CHAPTER IV
References
Edwards, S. (2001). “Dollarization and Economic Performance: An Empirical
Investigation.” NBER Working Paper No. 8274.
García-Escribano, Mercedes and Sosa, S., 2010. “What is Driving Financial Dedollarization in Latin America?” IMF Working Paper WP/11/10.
Feige, E. L. (2003). “The Dynamics of Currency Substitution, Asset Substitution
and De Facto Dollarization and Euroization in Transition Countries.” Comparative
Economic Studies, 45(3), 358-383.
Hijazeen Issa and Al-Assaf Ali, “Dollarization in Jordan. “International Journal of
Economics and Financial Issues, 2018, *(2), 14-24.
Honig, Adam, Dollarization, Exchange Rate Regimes and Government Quality
(2009). Journal of International Money and Finance, Vol. 28, No. 2, pp. 198-214,
2009.
Kostiantyn Khvedchuk, Valentyna Sinichenko and Barry Topf, “Estimating a Natural
Level of Financial Dollarization in Ukraine” Visnyk of the National Bank of Ukraine,
2019, No. 247, pp 38-44.
Levy-Yeyati, E., and Sturzenegger, F. (2003). “To Float or to Fix: Evidence on the
Impact of Exchange Rate Regimes on Growth.” American Economic Review,
93(4), 1173-1193.
Urosevic, Branko and Rajkovic, Ivana, Dollarization of Deposits in the Short and
Long Run: Evidence from CESE Countries (February 8, 2016). CESifo Working Paper
Series No. 5745.
MONEY, BANKING AND FINANCIAL INSTITUTIONS
75
Table 4.1
Select Monetary and Banking Indicators
2019
2020
2021
2022
2023
Reserve money (in RO million)
3,327
3,054
3,443
2,866
2,892
Currency with public (in RO million)
1,245
1,379
1,307
1,243
1,210
Narrow money M1 (in RO million)
5,344
5,562
5,747
5,606
5,981
Broad money M2 (in RO million)
17,752
19,337
20,221
20,335
23,001
CBO's foreign assets (in RO million)
6,407
5,771
7,587
6,775
6,734
Ratio of NFA of CBO to Reserve money
1.7
1.6
1.8
1.9
2.1
Ratio of NFA of banking system to M2
0.3
0.2
0.2
0.2
0.3
Number of conventional commercial banks
16
16
16
16
14
Number of branches of conventional commercial
banks
435
453
438
457
467
Number of branches of Islamic banking entities
84
91
93
97
122
Conventional commercial Bank (ATM, FFM, CDM)
1477
1487
1507
1640
1430
Islamic banking entities (ATM, FFM, CDM)
135
149
160
171
154
Other depository corporations Total Assets (in RO
million)
35,221
35,814
38,519
38,817
41,826
Other depository corporations Total Deposits (in RO
million)
23,657
24,166
25,610
25,902
29,101
Other depository corporations Total Credit (in RO
million)
25,830
26,676
27,873
29,223
30,474
Capital Adequacy ratio
18.5
18.9
19.9
19.7
18.9
Bank credit to GDP (%)
76.3
91.4
83.0
67.9
72.8
Bank credit to non-oil GDP (%)
104.4
116.9
115.7
105.6
108.2
Bank deposits to GDP (%)
69.9
82.8
76.3
60.2
69.6
Bank deposits to non-oil GDP (%)
95.6
105.9
106.3
93.6
103.4
Quasi-money to GDP (%)
36.6
47.2
43.1
34.2
40.7
Broad money to GDP (%)
52.4
66.3
60.2
47.2
55.0
Broad money to non-oil GDP (%)
71.7
84.8
83.9
73.5
81.7
Currency with public to GDP (%)
3.7
4.7
3.9
2.9
2.9
Currency with public to reserve money (%)
37.4
45.1
34.0
39.6
41.8
Currency with public to broad money (%)
7.0
7.1
6.5
6.1
5.3
Income velocity of broad money
1.9
1.5
1.7
2.1
1.8
Money multiplier (M2 over reserve money)
5.3
6.3
5.3
6.5
8.0
Stock market capitalization to GDP ratio (%)
55.4
69.4
65.8
55.1
56.9
Stock market capitalization to non-oil GDP ratio (%)
75.8
88.7
91.7
85.8
84.5
Monetary Indicators
Banking Indicators
Financial deepening indicators
Note: Other depository corporations include conventional banks and Islamic banks and windows.
Source: Central Bank of Oman
76
CHAPTER IV
Table 4.2
Monetary Base and its Sources
(Rial Omani Million)
2019
2020
2021
2022
2023
Currency Issued
1,611.5
1,736.9
1,716.1
1,611.5
Banks deposits with CBO*
1,715.3
1,317.0
1,727.0
Monetary Base (M0)
3,326.8
3,053.8
Foreign assets
6,406.6
Claims on Government
Fixed and other assets
Absolute Change
2022/21
2023/22
1,589.2
-104.5
-22.3
1,254.0
1,302.4
-473.0
48.4
3,443.1
2,865.5
2,891.6
-577.5
26.1
5,770.6
7,586.7
6,775.3
6,734.1
-811.4
-41.3
778.9
870.5
111.5
0.0
0.0
-111.5
0.0
335.9
397.1
457.7
347.1
360.4
-110.7
13.3
Net Worth (capital and reserves)
1,493.3
1,675.7
1,608.5
1,419.2
1,629.9
-189.2
210.7
Government deposits
1,402.5
1,017.9
1,605.6
1,536.2
1,094.8
-69.4
-441.4
Foreign liabilities
685.8
760.5
790.7
720.5
679.0
-70.2
-41.5
Other liabilities
613.0
530.3
303.6
304.6
338.1
0.9
33.6
Central Bank Assets
Less: Central Bank Liabilities
*excludes CDs issued by CBO to banks and foreign currency deposits.
Source: Central Bank of Oman
Table 4.3 Components of Broad Money
A. (Rial Omani Million)
End of the Period
2019
2020
2021
2022
2023
Money Supply (M1)
5,343.9
5,561.8
5,746.6
5,606.2
5,981.3
Currency with public
1,244.8
1,378.6
1,307.1
1,243.0
1,210.0
Demand deposits in local currency
4,099.1
4,183.1
4,439.4
4,363.2
4,771.3
12,407.8
13,775.4
14,474.3
14,729.2
17,019.4
Savings deposits in local currency
5,273.0
6,056.1
6,318.0
6,223.1
6,208.6
Time deposits in local currency
5,127.7
5,535.0
5,868.2
6,316.6
7,116.8
Deposits in foreign currency
1,765.0
1,896.6
1,923.9
1,842.6
3,266.9
Margins
242.0
287.7
364.2
346.9
427.2
17,751.7
19,337.2
20,220.8
20,335.5
23,000.7
Quasi Money
Broad Money (M2)
B. (Percentage To Total)
End of the Period
2019
2020
2021
2022
2022
Money Supply (M1)
30.1
28.8
28.4
27.6
26.0
Currency with public
7.0
7.1
6.5
6.1
5.3
Demand deposits in local currency
23.1
21.6
22.0
21.5
20.7
69.9
71.2
71.6
72.4
74.0
Savings deposits in local currency
29.7
31.3
31.2
30.6
27.0
Time deposits in local currency
28.9
28.6
29.0
31.1
30.9
Deposits in foreign currency
9.9
9.8
9.5
9.1
14.2
Margins
1.4
1.5
1.8
1.7
1.9
100.0
100.0
100.0
100.0
100.0
Quasi Money
Broad Money (M2)
Source: Central Bank of Oman
MONEY, BANKING AND FINANCIAL INSTITUTIONS
77
Table 4.4 Monetary Survey*
End of Period
2019
1. Broad money (A+B)
2020
2021
2022
2023
Change in
%
RO million Change
2023/22
2023/22
17,751.7 19,337.2 20,220.8 20,335.5 23,000.7
2,665.2
13.1
5,343.9
5,561.8
5,746.6
5,606.2
5,981.3
375.1
6.7
a) Currency with public
1,244.8
1,378.6
1,307.1
1,243.0
1,210.0
-33.0
-2.7
b) Demand deposits in RO
4,099.1
4,183.1
4,439.4
4,363.2
4,771.3
408.1
9.4
12,407.8 13,775.4 14,474.3 14,729.2 17,019.4
2,290.1
15.5
1,765.0
1,896.6
1,923.9
1,842.6
3,266.9
1,424.2
77.3
4,951.1
3,544.8
4,651.0
4,615.4
6,250.8
1,635.5
35.4
Central Bank
5,720.8
5,010.1
6,796.0
6,054.9
6,055.1
0.2
0.0
Other Depository Corporations
-769.6
-1,465.2
-2,145.1
-1,439.5
195.7
1,635.2
-
1,029.8
6.6
A. Money Supply (M1)
B. Quasi Money
(of which foreign cy. deposits)
2. Foreign Assets (net)
3. Domestic Assets
12,800.6 15,792.4 15,569.9 15,720.1 16,749.9
a) Claims on Government (net)(i-ii) -4,647.2 -2,060.8
-2,884.4
-3,624.0 -3,897.7
-273.7
7.6
i) Government borrowings
3,401.7
4,558.7
4,827.2
4,278.1
3,777.7
-500.4
-11.7
ii) Government deposits
8,048.9
6,619.4
7,711.6
7,902.2
7,675.4
-226.8
-2.9
b) Domestic claims on Pvt. Sector
22,951.0 23,155.7 23,659.0 24,655.7 25,818.5
1,162.8
4.7
c) Claims on Public enterprises
2,724.7
3,141.7
3,752.3
3,909.6
4,318.2
408.6
10.4
d) Other items (net) (-)
8,227.9
8,444.3
8,957.0
9,221.2
9,489.1
267.9
2.9
3,852.4
3,484.0
3,994.8
3,275.7
3,750.2
474.6
14.5
ii) Other Depository Corporations 4,375.5
4,960.3
4,962.2
5,945.5
5,738.9
-206.7
-3.5
i) Central Bank
* Monetary survey aggregates include that of conventional banks and Islamic banks and windows.
Source : Central Bank of Oman
Table 4.5 Absorption and Injection of Liquidity by CBO during 2023
Liquidity Absorption
(Treasury Bills)
Month
Amount Issued
Outstanding TBs at
During the Month the end of the Month
(RO Million)
(RO Million)
Liquidity Injection
(Repos With CBO)*
Amount Repoed
During The Month
(RO Million)
Outsatnding
Repo Rate
Repo Amount
(% p.a)
(RO Million)
January
207.00
409.8
165.0
80.0
5.000
February
133.00
474.8
237.0
0.0
5.241
March
166.90
461.9
261.0
0.0
5.323
April
193.00
504.2
50.0
0.0
5.500
May
135.40
495.6
199.0
0.0
5.726
June
41.10
397.1
134.0
0.0
5.750
July
142.05
356.4
105.0
0.0
5.790
August
187.50
288.9
97.0
0.0
6.000
September
79.90
330.0
126.0
0.0
6.000
October
119.00
360.4
50.3
0.0
6.000
November
151.70
326.1
0.5
0.0
6.000
December
132.88
346.9
0.0
0.0
6.000
* Includes repos in instruments such as GDBs, T.Bs, and excludes intra-day repos.
Source: Central Bank of Oman
78
CHAPTER IV
Table 4.6 (a)
Holding Pattern of Outstanding Government Development Bonds* (end 2023)
Local
Abroad
Total Holdings
(R.O. Million)
(R.O. Million)
(R.O. Million)
Percentage to
Total
1411.16
21.04
1432.20
56.89
Govt Entities
0.10
0.00
0.10
0.00
Pension Funds
867.64
0.00
867.64
34.46
Other Financial Institutions
168.67
0.00
168.67
6.70
Non- Financial Institutions
11.06
0.00
11.06
0.44
Individuals
37.81
0.06
37.87
1.50
Total
2496.44
21.10
2517.54
100.0
Banks
* Excludes Investments in Government Sukuk.
Note: Holding pattern based on primary issuance.
Source: Central Bank of Oman
Table 4.6 (b)
Stock Market Indicators
2019
2020
2021
2022
2023
1) MSX 30 Share Price Index
3,981.19
3,658.77
4,129.54 4,857.44
4,514.07
2) Number of shares traded (Million)
3863.5
2282.0
4135.0
4282.7
4517.5
3) Number of bonds traded (Million)
33.4
25.3
74.4
54.2
139.6
4) Total turnover of trading (RO Million)
712
441
818
940
1133
a) Turnover of trading in shares (RO Million)
662
401
645
883
1006
b) Turnover of trading in bonds (RO Million)
50
40
173
58
127
5) Number of trading days
245
243
246
247
247
6) Average value of trading per day in shares &
bonds (RO Million)
2.90
1.81
3.30
3.81
4.59
7) Market capitalization (RO Million)
18767
20242
22091
23736
23802
Source: Muscat Securities Market
MONEY, BANKING AND FINANCIAL INSTITUTIONS
79
Table 4.7 (a) Weighted Average Interest Rates*
(percent per annum)
Deposit Rate
Lending Rate
Spread
End of
Period
Total RO
Deposits
(1)
Mar-2019
Jun-2019
Sep-2019
Dec-2019
Mar-2020
1.890
1.943
1.987
2.006
1.936
1.558
1.661
1.671
1.774
1.557
1.850
1.909
1.948
1.977
1.884
5.348
5.416
5.463
5.461
5.479
5.317
5.196
4.904
4.639
4.282
5.343
5.381
5.372
5.324
5.268
Jun-2020
1.951
1.565
1.904
5.381
3.804
Sep-2020
1.916
1.651
1.882
5.481
Dec-2020
2.013
1.640
1.966
Mar-2021
2.009
1.672
Jun-2021
Sep-2021
1.952
1.957
Dec-2021
Total Fcy Total Depos- Total RO
Deposits its (RO+Fcy) Lending
(2)
(3)
(4)
Total Fcy Total LendRO
Lending ing (RO+Fcy)
(4)-(1)
(5)
(6)
Fcy
(5)-(2)
Total
(6)-(3)
3.457
3.473
3.477
3.455
3.543
3.759
3.535
3.233
2.865
2.725
3.493
3.472
3.423
3.347
3.384
5.095
3.430
2.239
3.191
3.543
5.133
3.565
1.892
3.251
5.511
3.475
5.140
3.498
1.835
3.174
1.966
5.511
3.529
5.147
3.502
1.857
3.181
1.618
1.473
1.910
1.896
5.524
5.495
3.537
3.497
5.148
5.105
3.572
3.538
1.919
2.024
3.239
3.210
1.976
1.438
1.910
5.570
3.520
5.153
3.594
2.082
3.242
Mar-2022
1.923
1.283
1.846
5.485
3.668
5.134
3.562
2.385
3.288
Jun-2022
1.870
1.410
1.813
5.502
4.643
5.334
3.632
3.233
3.521
Sep-2022
1.877
1.606
1.841
5.416
5.562
5.443
3.539
3.956
3.602
Dec-2022
1.993
2.582
2.065
5.379
6.926
5.640
3.386
4.344
3.575
Mar-2023
2.124
2.856
2.218
5.381
7.243
5.646
3.257
4.387
3.428
Jun-2023
2.313
3.180
2.424
5.434
7.521
5.709
3.121
4.341
3.285
Sep-2023
2.453
2.799
2.506
5.451
7.787
5.742
2.998
4.988
3.235
Dec-2023
2.636
3.115
2.722
5.514
7.512
5.758
2.878
4.397
3.037
*Conventional banks only
Source: Central Bank of Oman
Table 4.7 (b)
Interest Rate-wise Distribution of Rial Omani Total Deposits
December 2019 December 2020 December 2021 December 2022 December 2023
Rate of Interest
(% per annum) Amount % Share Amount % Share Amount % Share Amount % Share Amount % Share
(RO mn)
(RO mn)
(RO mn)
(RO mn)
(RO mn)
Upto 2%
9,664.7
55.0
10,180.7
57.1
10,438.8
56.1
10,054.1
54.5
10,181.3
50.3
Over 2% TO 3%
690.4
3.9
486.9
2.7
759.2
4.1
924.2
5.0
434.4
2.1
Over 3% TO 4% 2,048.4
11.6
1,161.8
6.5
2,272.0
12.2
3,036.1
16.4
1,068.0
5.3
Over 4% TO 5%
4,653.6
26.5
4,722.0
26.5
3,784.6
20.3
2,921.9
15.8
2,140.2
10.6
Over 5% TO 6%
474.5
2.7
1,170.8
6.6
1,314.7
7.1
1,478.2
8.0
5,060.5
25.0
Over 6% TO 7%
53.5
0.3
105.7
0.6
38.5
0.2
43.0
0.2
1,347.7
6.7
Over 7% TO 8%
0.5
0.0
0.4
0.0
0.2
0.0
0.3
0.0
0.1
0.0
Over 8% TO 9%
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Over 9% TO 10%
Over 10%
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Total
17,585.5 100.0
Weighted average interest rate
(%)
2.006
17,828.4 100.0
2.013
18,607.8 100.0
1.976
18,457.8 100.0
1.993
20,232.4 100.0
2.642
*Conventional banks only
Source: Central Bank of Oman
80
CHAPTER IV
Table 4.7 (c)
Interest Rate-wise Distribution of Rial Omani Time Deposits
December 2019 December 2020 December 2021
December 2022
December 2023
Amount
Amount
Amount
% Share
% Share
% Share
(RO mn)
(RO mn)
(RO mn)
Amount
(RO mn)
% Share
Amount
(RO mn)
% Share
Rate of Interest
(% per annum)
Upto %2
541.5
7.2
716.5
9.6
670.2
9.1
692.7
9.1
621.4
7.1
Over %2 TO %3
478.6
6.4
288.7
3.9
304.0
4.1
386.3
5.1
92.0
1.0
Over %3 TO %4
1,332.6
17.7
632.5
8.5
1,391.9
18.9
2,329.4
30.5
629.5
7.2
Over %4 TO %5
4,640.1
61.7
4,536.9
60.9
3,655.3
49.6
2,719.8
35.6
1,808.4
20.5
Over %5 TO %6
474.3
6.3
1,170.5
15.7
1,312.7
17.8
1,460.5
19.1
4,758.6
54.1
Over %6 TO %7
53.5
0.7
105.7
1.4
38.5
0.5
43.0
0.6
891.0
10.1
Over %7 TO %8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Over %8 TO %9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.0
Over %9 TO %10
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
0.0
Over %10
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
7,520.6
100.0
7,450.9
100.0
7,372.6
100.0
7,631.9
100.0
8,801.2
100.0
Total
Weighted
average interest 3.995
rate (%)
4.153
4.067
3.950
4.873
*Conventional banks only
Source: Central Bank of Oman
Table 4.7 (d)
Interest Rate-wise Distribution of Rial Omani Total Lending
Rate of Interest
(% per annum)
December 2019
December 2020
Amount
Amount
% Share
% Share
(RO mn)
(RO mn)
December 2021
December 2022
December 2023
Amount
(RO mn)
% Share
Amount
% Share
(RO mn)
Amount
(RO mn)
% Share
Upto %2
601.8
3.3
541.1
3.0
507.1
2.8
506.0
2.6
245.2
1.1
Over %2 TO %4
2,196.9
12.1
2,129.0
11.7
1,807.7
9.9
2,225.1
11.3
2,078.3
9.7
Over %4 TO %5
3,475.5
19.1
2,761.3
15.1
2,986.7
16.3
4,849.0
24.5
5,088.3
23.8
Over %5 TO %7
9,978.4
54.8
11,239.5
61.6
11,346.7
61.9
10,784.8
54.5
12,228.2
57.1
Over %7 TO %8
1,419.9
7.8
1,031.1
5.6
1,114.8
6.1
883.7
4.5
1,189.7
5.6
Over %8 TO %9
183.3
1.0
205.4
1.1
181.3
1.0
163.5
0.8
192.5
0.9
Over %9 TO %10
38.0
0.2
49.9
0.3
45.9
0.3
44.2
0.2
61.9
0.3
Over %10 TO %11
40.6
0.2
43.6
0.2
45.1
0.2
74.7
0.4
43.9
0.2
Over %11 TO %12
158.0
0.9
131.8
0.7
142.3
0.8
107.0
0.5
149.2
0.7
Over %12 TO %13
7.3
0.0
19.8
0.1
5.1
0.0
5.4
0.0
8.3
0.0
Over %13
121.4
0.7
107.9
0.6
134.1
0.7
135.3
0.7
116.0
0.5
Total
18,221.0
100.0
18,260.4
100.0
18,316.9
100.0
19,778.5
100.0
21,401.3
100.0
Weighted average
interest rate (%)
5.453
5.511
5.570
5.380
5.514
*Conventional banks only
Source: Central Bank of Oman
MONEY, BANKING AND FINANCIAL INSTITUTIONS
81
Table 4.7 (e)
Domestic Inter-Bank Overnight Lending Rates
(Conventional Banks)
2020
2021
Daily avg.
Amount
(RO mn)
2022
2023
Monthly Weight- Daily avg.
ed avg. Interest
Amount
rate*
(RO mn)
Monthly
Weighted avg.
Interest rate*
Period
Daily avg. Monthly Weight- Daily avg. Monthly WeightAmount ed avg. Interest
Amount
ed avg. Interest
(RO mn)
rate*
(RO mn)
rate*
Jan
32.9
1.865
28.6
0.610
82.6
0.391
19.7
4.357
Feb
45.1
1.868
19.5
0.547
36.7
0.430
24.0
4.730
March
46.4
2.088
10.5
0.547
32.6
0.409
36.4
5.073
IQ Avg
41.5
1.941
19.5
0.568
50.6
0.410
26.7
4.720
April
34.3
1.836
17.9
0.394
71.9
0.630
38.8
5.147
May
26.4
1.552
25.3
0.405
35.0
1.226
32.1
5.295
June
31.0
1.570
19.3
0.336
16.8
1.450
25.0
5.350
IIQ Avg
30.6
1.653
20.8
0.378
41.2
1.102
32.0
5.264
July
16.4
0.977
44.2
0.420
23.7
1.951
50.5
5.540
August
13.7
1.100
28.0
0.482
36.4
2.854
54.1
5.721
September
21.1
0.780
37.3
0.438
41.8
3.151
58.5
5.388
IIIQ Avg
17.1
0.952
36.5
0.447
34.0
2.652
54.4
5.550
October
24.6
0.859
27.7
0.447
32.3
3.299
60.7
5.584
November
18.6
0.948
23.9
0.413
31.1
3.944
34.6
5.459
December
24.2
0.700
18.4
0.369
23.2
4.271
49.1
5.417
IVQ Avg
22.5
0.836
23.3
0.410
28.9
3.838
48.1
5.487
* Weighted by individual transaction amounts
Source: Central Bank of Oman
82
CHAPTER IV
Table 4.8 (a)
Central Bank of Oman Assets and Liabilities
(Rial Omani Million)
2019
2020
2021
2022
2023
% Change
2023/2022
6,406.7
5,770.6
7,586.7
6,775.3
6,734.1
- 0.6
a) Bullion
0.5
0.7
0.6
47.9
77.3
61.4
b) IMF Reserve assets
110.3
127.1
442.7
442.4
442.0
-0.1
c) Placements abroad
2,731.2
2,327.1
4,071.9
2,851.8
2,854.7
0.1
d) Securities
3,564.7
3,315.7
3,071.5
3,433.3
3,360.1
-2.1
Due from Government
778.9
870.5
111.5
0.0
0.0
0.0
Due from Banks
0.1
65.2
115.6
0.3
1.1
216.2
Fixed Assets
45.1
45.2
58.0
56.6
60.0
5.9
Other Assets
290.7
286.8
284.2
290.1
299.3
3.2
Total Assets / Liabilities
7,521.4
7,038.2
8,156.0
7,122.4
7,094.4
-0.4
Currency Issued
1,611.5
1,736.9
1,716.1
1,611.5
1,589.2
-1.4
Net Worth
1,493.3
1,675.7
1,608.5
1,419.2
1,629.9
14.8
a) Capital
1,000.0
1,000.0
1,000.0
1,000.0
1,000.0
0.0
b) General Reserves
365.5
426.0
447.8
480.1
555.3
15.7
c) Others
127.8
249.7
160.6
-60.9
74.6
-222.6
Due to Government
1,402.5
1,017.9
1,605.6
1,536.2
1,094.8
-28.7
Due to Banks
2,001.8
1,539.8
2,131.5
1,530.4
1,763.3
15.2
Foreign Liabilities*
685.8
760.5
790.7
720.5
679.0
-5.8
Other Liabilities
326.5
307.5
303.6
304.6
338.1
11.0
a) CDs
0.0
0.0
0.0
0.0
0.0
0.0
b) Others
326.5
307.5
303.6
304.6
338.1
11.0
Foreign Assets including Bullion
*Includes SDR allocation
Source: Central Bank of Oman
Table 4.8 (b)
Central Bank’s Own Foreign Assets
(Rial Omani Million)
2019
2020
2021
2022
2023
Absolute
Change
2022/2021
6,406.6
5,770.6
7,586.7
6,775.3
6,734.1
-41.3
a) Bullion
0.5
0.7
0.6
47.9
77.3
29.4
b) IMF Reserve Assets
110.3
127.1
442.7
442.4
442.0
-0.4
c) Placements Abroad
2,731.2
2,327.1
4,071.9
2,851.8
2,854.7
2.9
d) Securities
3,564.7
3,315.7
3,071.5
3,433.3
3,360.1
-73.2
1. Gross Foreign Assets
Less:
Foreign cy. deposits from Government
0.0
1,401.4
1,017.5
1,604.9
1,514.3
1,070.5
-443.8
286.8
222.8
405.0
236.0
430.9
194.9
2. Central Bank’s Own Foreign Assets 4,718.4
4,530.2
5,981.9
5,261.0
5,663.5
402.5
Foreign cy. deposits from banks
Source : Central Bank of Oman
MONEY, BANKING AND FINANCIAL INSTITUTIONS
83
Table 4.9
Combined Balance Sheet of Other Depository Corporations
(Rial Omani Million)
2019
2020
2021
2022
2023
% Change
2023/22
Cash on hand and deposits with CBO
2,377.1
1,874.4
2,526.1
1,907.6
2,118.1
11.0
Due from Head Office, affiliates
and other banks abroad
1,472.1
883.3
1,107.5
1,075.7
1,635.8
52.1
Total Credit
25,830.4
26,676.2
27,873.1
29,223.2
30,474.3
4.3
Total investments
3,952.3
4,762.8
5,359.6
4,866.3
5,597.5
15.0
Net fixed assets
316.2
308.2
324.6
302.7
401.0
32.5
Other assets
1,272.9
1,309.1
1,328.4
1,441.7
1,598.9
10.9
Total assets/liabilities
35,221.0
35,814.1
38,519.5
38,817.1 41,825.6
7.8
Total deposits
23,657.3
24,165.5
25,610.4
25,901.9
29,100.7
12.3
Due to Head Office, affiliates
and other banks abroad
2,872.3
2,707.4
3,212.0
2,958.6
2,799.7
-5.4
Core capital and reserves
5,599.0
5,691.0
6,087.5
6,355.8
6,324.2
-0.5
Supplementary capital
153.9
95.9
74.9
-1.5
38.5
_
Total provisions & reserve interest
952.3
1,179.0
1,331.7
1,502.8
1,695.4
12.8
(of which general provisions)
)327.4(
)402.6(
)448.9(
)568.9(
)656.5(
15.4
1,986.2
1,975.4
2,202.8
2,099.4
1,867.1
-11.1
Other liabilities
Note: Other Depository Corporations include conventional commercial banks and Islamic banks and windows.
Source: Central Bank of Oman
84
CHAPTER IV
Table 4.10 (a)
Combined Balance Sheet of Conventional Banks
(Rial Omani Million)
% Change
2019
2020
2021
2022
2023
Cash and deposits with CBO
2,001.0
1,650.4
2,155.4
1,640.8
1,726.5
5.2
Due from Head Office, affiliates and banks
abroad
1,759.7
1,167.6
1,373.0
1,453.9
1,934.8
33.1
Total Credit
21,864.2
22,331.4
23,000.9
23,784.0
24,386.5
2.5
a) Credit to Private Sector
18,898.5
18,772.3
19,095.9
19,469.7
20,041.3
2.9
b) Credit to public enterprises
2,524.0
2,927.2
3,136.5
3,269.2
3,599.8
10.1
c) Credit to Government
136.9
477.8
620.4
844.6
516.4
-38.9
d) Credit to Non-Residents
304.8
154.1
148.2
200.5
229.1
14.3
Securities
3,568.6
4,290.2
4,846.9
4,287.8
5,000.1
16.6
a) Treasury Bills
294.8
512.5
1,041.9
375.3
345.2
-8.0
b) Government Bonds*
1,626.8
1,798.5
2,173.6
2,185.1
1,903.9
-12.9
c) CBO CDs
0.0
0.0
0.0
0.0
0.0
-
d) Domestic shares
68.9
170.3
161.6
165.1
206.2
25.0
e) Other domestic securities
450.9
659.8
674.0
675.9
789.4
16.8
f) Foreign securities
1,127.2
1,149.1
795.8
886.4
1,755.4
98.0
Fixed assets
286.2
279.8
294.8
285.5
376.3
31.8
Other assets
1,326.7
1,365.9
1,331.4
1,338.5
1,567.1
17.1
Total assets / liabilities
30,806.4
31,085.4
33,002.4
32,790.5
34,991.3
6.7
Total Deposits
20,062.1
20,377.0
21,207.2
21,020.8
23,590.9
12.2
a) Government deposits
5,389.1
4,368.3
4,783.3
4,917.8
5,039.5
2.5
b) Deposits of public enterprises
1,270.1
1,082.0
1,381.2
1,421.1
2,243.1
57.8
c) Deposits of private sector
13,031.4
14,452.2
14,539.0
14,253.1
15,609.1
9.5
i) Demand
3,664.1
3,977.6
4,096.9
3,999.0
5,150.4
28.8
ii) Savings
4,745.2
5,362.7
5,455.5
5,423.9
5,223.7
-3.7
iii) Time
4,395.9
4,838.6
4,713.4
4,574.4
4,904.9
7.2
iv) Commercial prepayments
226.2
273.3
273.2
255.8
330.0
29.0
(of which in foreign currency)
1,353.5
1,556.5
1,462.4
1,324.3
2,077.9
56.9
371.5
474.6
503.7
428.8
699.2
63.0
Due to Head Office, affiliates and banks
abroad
2,695.8
2,511.8
3,008.0
2,738.7
2,598.7
-5.1
Core Capital and Reserves
5,272.0
5,320.9
5,602.0
5,835.0
5,737.9
-1.7
Supplementary Capital
158.9
101.0
79.8
1.2
50.4
-
Total provisions and reserved interest
876.3
1,070.7
1,196.2
1,330.1
1,483.6
11.5
(277.4)
(340.5)
(368.4)
(460.9)
(558.5)
21.2
1,741.3
1,703.9
1,909.1
1,864.6
1,529.8
-18.0
d) Deposits of non-residents
(of which general provisions)
Other liabilities
2023/22
* Includes Investments in Government Sukuk
Source : Central Bank of Oman
MONEY, BANKING AND FINANCIAL INSTITUTIONS
85
Table 4.10 (b)
Sources and Uses of Conventional Bank Funds
(Rial Omani Million)
Source of Funds
2022
2023
2022
2023
-186.4
2,570.0
783.1
602.5
a) Government deposits
134.5
121.6
a) Credit to Govt.
224.3
-328.2
b) Deposits of public enterprises
39.9
822.0
b) Credit to public enterprises
132.8
330.5
c) Deposits of Private Sector
-285.9
1,356.0
c) Credit to private sector
373.8
571.5
1. Financial corporations
116.5
85.8
1. Financial corporations
51.4
268.9
2. Non-Financial corporations
-336.4
1,036.9
2. Non-Financial corporations
24.0
-103.6
3. Household sector
-37.5
183.8
3. Household sector
262.3
345.5
4. Other sectors
-28.5
49.6
4. Other sectors
36.1
60.7
-74.8
270.4
d) Credit to non-residents
52.3
28.7
2. Borrowings from banks abroad
-270.5
-138.8
2. Investments in securities
-559.1
712.3
Increase in Capital, reserves &
provisions
233.0
-97.1
3.
Placements with banks
abroad
80.9
480.9
12.0
-336.0
4. Cash and Deposits with CBO
-514.6
85.7
5. Fixed assets
-9.2
90.8
6. Other assets
7.0
228.6
-211.9
2,200.8
1. Total deposits
d) Non-resident deposits
3.
4. Other liabilities
Total sources of funds
-211.9
2,200.8
Uses of Funds
1. Total credit disbursement
Total uses of funds
Source: Central Bank of Oman
Table 4.10 (c)
Non-Resident Assets and Liabilities of Conventional Banks
(Rial Omani Million)
2019
2020
2021
2022
2023
Absolute
Change
Foreign Assets
3,221.6
2,504.3
2,359.6
2,574.9
4,015.3
1,440.4
Due from banks abroad
1,759.7
1,167.6
1,373.0
1,453.9
1,934.8
480.9
Credit to Non-Residents
304.8
154.1
148.2
200.5
229.1
28.7
Investment in foreign securities
1,127.2
1,149.1
795.8
886.4
1,755.4
868.9
Other assets
29.9
33.5
42.7
34.1
96.0
61.9
Foreign Liabilities
3,917.8
3,855.9
4,357.1
3,878.3
3,597.7
-280.6
Deposits of Non-Residents
371.5
474.6
503.7
428.8
699.2
270.4
Long term bonds
581.9
583.1
813.9
694.7
195.1
-499.6
Due to banks abroad
2,694.0
2,511.4
3,008.0
2,737.5
2,598.7
-138.8
Other liabilities
270.3
286.8
31.6
17.2
104.6
87.4
Net Foreign Assets
-696.2
-1,351.6
-1,997.5
-1,303.4
417.7
1,721.1
Source: Central Bank of Oman
86
CHAPTER IV
Table 4.11
Combined Balance Sheet of Islamic Banks/Windows
(Rial Omani Million)
2019
2020
2021
2022
2023
% Change
22/2023
Cash on hand and deposits
with CBO
376.1
224.1
370.7
266.9
391.6
46.7
Due from Head Office, affiliates and other banks abroad
59.9
30.4
27.7
49.3
112.2
127.8
Total financing
3,966.2
4,344.7
4,847.5
5,439.1
6,087.8
11.9
Total investments
383.7
471.7
512.8
578.5
597.2
3.2
Net fixed assets
30.2
28.4
29.8
17.1
24.7
44.2
Other assets
68.4
95.2
84.2
61.2
135.8
122.0
Total assets/liabilities
4,884.6
5,194.4
5,900.3
6,412.0
7,349.5
14.6
Total deposits
3,595.1
3,788.5
4,403.2
4,881.0
5,509.8
12.9
Due to Head Office, affiliates
and other banks abroad
177.1
175.8
204.0
319.9
200.9
-37.2
Core capital and reserves
544.6
635.0
763.9
807.3
898.9
11.3
Other liabilities
567.7
595.1
529.2
403.8
548.6
35.9
Source: Central Bank of Oman
Table 4.12
Profitability of Other Depository Corporations
(Rial Omani Million)
2019
2020
2021
2022
2023
% Change % Change
2022/21
2023/22
1. Interest/Profit Income
1,514.8 1,513.3 1,557.8 1,694.4 1,961.4
8.8
15.8
2. (Interest Expenses)
(661.6) (653.1) (674.3) (716.5) (988.0)
6.3
37.9
3. Net Interest/Profit
853.2
860.2
883.4
977.9
973.4
10.7
- 0.5
4. Foreign Exchange earnings
85.4
70.3
64.5
64.0
74.8
- 0.8
17.0
5. Fees and Commissions
105.0
95.1
88.5
88.5
90.0
- 0.1
1.8
6. Other Income
209.7
163.0
216.2
220.1
189.7
1.8
-13.8
7. Gross Income (3+4+5+6)
1,253.3 1,188.6 1,252.6 1,350.4 1,328.0
7.8
-1.7
8. Operating Expenses
567.6
568.8
596.6
613.5
575.4
2.8
-6.2
a) Administrative Costs
517.3
503.6
547.1
559.5
523.9
2.3
-6.4
b) Depreciation
49.8
64.6
49.2
53.8
51.3
9.2
-4.6
c) Others
0.5
0.5
0.3
0.2
0.3
- 41.9
47.4
9. Gross Profits (7-8)
685.7
619.8
656.0
736.9
752.5
12.3
2.1
10. Provision for doubtful debts *
217.8
325.7
271.6
269.3
240.6
-0.9
-10.7
11. Profits after provisions (9-10)
467.9
294.1
384.4
467.6
512.0
21.6
9.5
12. Provision for Taxes
70.6
52.8
59.9
67.5
70.5
12.6
4.5
13. Net Profit after Provisions & Taxes (11-12) 397.3
241.4
324.5
400.1
441.5
23.3
10.3
* Gross provisions made during the year. Recoveries on previous loan loss provisions are reflected under other income.
Note: Profits comprise that of conventional banks and Islamic banks and windows.
Source : Central Bank of Oman
MONEY, BANKING AND FINANCIAL INSTITUTIONS
87
Table 4.13
Distribution of Bank* Credit by Economic Sectors
(Rial Omani Million)
End of Period
2019
2020
2021
2022
2023
Import Trade
1,010.5
855.9
885.7
930.4
1,064.4
Export Trade
28.3
40.4
40.4
42.2
18.0
Wholesale & Retail Trade
1,075.7
1,049.2
1,288.7
1,258.1
1,315.8
Mining and Quarrying
1,113.2
1,426.4
970.3
1,025.7
1,157.0
Construction
2,803.2
2,735.4
2,751.1
2,758.2
2,748.4
Manufacturing
2,172.9
2,168.4
2,502.5
2,424.0
2,494.0
Electricity, gas and water
1,302.2
1,433.7
1,406.6
1,639.6
1,767.3
Transport and Communication
1,240.6
1,367.9
1,575.5
1,723.0
2,190.1
Financial Institutions
1,244.8
1,167.4
1,214.1
1,305.8
1,655.9
Services
2,193.6
2,512.0
2,871.0
2,936.7
2,085.9
Government
136.9
477.8
620.4
844.6
625.8
Personal Loans
10,242.1
10,269.6
10,542.1
10,935.2
11,426.9
Agriculture and allied activities
50.2
73.7
171.1
256.9
315.6
Non-Resident lending
309.2
157.1
150.1
202.4
246.0
All Others
907.0
941.0
858.8
940.5
1,363.1
Total Credit
25,830.4
26,676.0
27,848.4
29,223.3
30,474.3
Source: Central Bank of Oman
*Includes conevtional banks and Islamic banking entities
Table 4.14
Finance and Leasing Companies (FLC) Indicators
(Rial Omani Million)
2019
2020
2021
2022
2023
Total Assets
1,127.0
993.7
1,002.2
1,066.7
1,177.5
Loans/Lease Portfolio*
996.5
883.2
861.8
925.3
1,032.2
Gross Non-Performing Loans
162.0
167.1
168.0
176.7
187.2
Cash and Bank Balances
103.5
84.6
114.9
113.4
113.7
Borrowings from Banks & Financial Institutions
725.2
642.3
635.9
593.4
691.2
Paid Up Capital
174.3
174.3
174.8
175.9
180.9
Capital & Reserves
304.6
301.8
312.6
321.8
314.7
Loan Loss Provisions and Reserve Interest
98.0
112.0
126.1
127.4
141.8
Net Profit After Provisions and Tax
18.4
10.5
17.0
18.6
21.3
Number of Branches (Including Head Office)
39
41
41
32
39
* Loans net of provisions & reserve interest
Source: FLC Annual Reports
88
CHAPTER IV
Payment and Settlement Systems
Table 4.15 (a)
RTGS Business Trends
Table 4.15 (b)
ACH Business Trends
Year
No. of
Transactions
Value
(RO Millions)
Year
No. of
Transactions
Value
(RO Millions)
2019
649,723
212,157
2019
8,707,478
5,565
2020
754,616
155,542
2020
10,453,000
6,030
2021
757,927
154,649
2021
14,548,566
9,178
2022
723,336
179,347
2022
18,505,802
11,460
2023
680,076
209,867
2023
21,887,363
13,509
Table 4.15 (c)
Electronic Cheque Clearing
Table 4.15 (d)
Oman Net Switch Business Trends
Year
No. of
Transactions
Value
(RO Millions)
Year
No. of
Transactions
Value
(RO Millions)
2019
4,639,601
15,000
2019
108,278,755
4,316
2020
3,910,962
11,771
2020
128,757,655
4,547
2021
3,780,009
9,796
2021
180,821,400
5,167
2022
3,745,001
9,969
2022
252,929,529
5,865
2023
3,714,271
10,293
2023
329,579,118
6,423
Table 4.15 (e)
Mobile Payment Clearing Switch System
Year
No. of
Transactions
Value
(RO Millions)
2020
195,903
13
2021
755,548
58
2022
4,944,730
294
2023
40,609,732
1,720
Source: Central Bank of Oman
MONEY, BANKING AND FINANCIAL INSTITUTIONS
89
CHAPTER
External Sector
Developments
ANNUAL REPORT
Overall Assessment
The year 2023 witnessed moderate economic
growth following a period of elevated postpandemic expansion. High interest rates
boosted returns on external assets, and strong
market demand for services alleviated the
pressure of lower energy prices and imported
inflation on external sector performance.
Oman’s current account balance (CAB)
registered a surplus of 2.4 percent of GDP
in 2023 compared to 3.9 percent of GDP in
2022. While the energy sector continues to
be the main contributor to real transactions
in the external sector, it is anticipated that
government’s reform measures is expected
to enhance the role and performance of
the State-Owned Entities (SOE’s) in the near
future. The Code of Governance issued by
the Oman Investment Authority (OIA) in early
2022, divestment plans, and proactive stance
on attracting Foreign Direct Investment (FDI)
were significant in minimizing the cost of
debt. Moreover, financial institutions’ liquidity
remained healthy, while investment-boosting
initiatives backed the economic growth and
diversification. Overall 1 market sentiment
remained positive as the government stood
firm in its commitment to fiscal consolidation
and a diversified economy.
92
Trade balance surplus narrowed in 2023 as oil
exports fell due to a lower average oil prices,
which fell by 13.7 percent, while non-oil
exports maintained a similar level. The Nominal
Effective Interest Rate (NEER) appreciated,
reducing the cost of imported products from
some partner economies. The deficit in the
services account balance moderated on
the back of a surge in external demand for
domestic travel and transport services. The
primary income deficit contracted as returns
from investments improved. The secondary
income account expanded by 4 percent
in line with the growth seen in number of
expatriate workers during 2023.
The Financial Account has sustained a net
lending position for two consecutive years.
The fiscal discipline of the government and
ongoing efforts to reduce government debt
to a sustainable level were key components
in lowering government liabilities. Moreover,
deposit-taking corporations seized the
opportunity of high global interest rates to
increase their portfolio assets and repay
outstanding liabilities.
Overall, total foreign reserve assets (foreign
reserves of the Central Bank of Oman and
those held with the Oman Investment
Authority) experienced accumulation during
the year.
CHAPTER V
Nominal Effective Exchange Rate (NEER)
Oman’s NEER index represents the value of
the Omani Rial against the weighted basket
of 18 country currencies, which represent the
major importing economies or trade partners
of Oman (base year=1999). An increase in
the NEER index indicates an appreciation of
the Omani Rial, making imports from partner
economies less expensive and increasing
the value of exports in terms of one unit of
currency exchange.
The import weighted index recorded a value
of 114.3 by December 2023 compared to
112.8 in 2022 (Table 5.1). Throughout the
year, the NEER value increased and reached
its peak at 117.7 in October 2023, before
depreciating again by December 2023
(Chart 5.1). Despite the impact of a higher
exchange rate on the competitiveness
of exports, non-oil exports of Omani origin
remained steady at 2022 levels. The stable
demand for Omani exports can be attributed
to increased global demand and the launch
of major chemical plants and associated
products, which provide a competitive
advantage.
Current Account
Despite a narrowing of the surplus, the
current account balance (CAB) remained
robust in 2023, driven by sustained and
favorable merchandise trade balance
and improvements in the services and
primary income balances. The deficits in
the services account and primary income
accounts shrank by 23.6 percent and 44.0
percent, respectively. As a result of these
developments, the current account posted a
surplus of OMR 1,014 million in 2023 compared
to OMR 1,677 million in 2022 (Chart 5.2).
Amidst an environment of continued
tightened global monetary conditions in
2023 to address inflation and waning of
supply chain disruptions, the year witnessed
a moderation in oil and gas prices that
drove a contraction in the merchandise
trade balance by 23.9 percent to OMR
9,168 million in 2023. The services account
registered a lower deficit of OMR 2,502 million
driven mainly by recovery in transportation
and travel services receipts. The primary
income recorded a significant improvement
on the back of contraction in debits of
direct investment income and expansion
of credits of investment income as a whole.
With respect to secondary income, personal
transfers increased to OMR 3,627 million in
2023 compared to OMR 3,488 million in 2022
(Chart 5.3). These developments combined
contributed to the narrowing of the current
account balance.
5.1: NEER and Non-Oil Exports
116
8250
114
7250
112
110
108
5250
106
4250
104
3250
102
Base: 1999=100)
OMR Million
6250
100
2250
98
1250
96
250
94
2019
NEER (1999=100)
EXTERNAL SECTOR DEVELOPMENTS
2020
2021
2022
2023
Non-oil Exports (OMR million)
93
Chart 5.2: Current Account Balance
4000
5
3000
OMR Million
1000
-5
0
-1000
2019
2020
2021
2022
Percent
0
2000
2023
-10
-2000
-3000
-15
-4000
-5000
-20
Current Account Balance (OMR million) (LHS)
Current Account Balance as % of GDP (RHS)
Chart 5.3: Outward Remittances
4250
30
3750
25
20
2750
2250
15
1750
Percent
OMR Million
3250
10
1250
5
750
250
0
2019
2020
Remittances (as % of export
earnings) (RHS)
94
2021
2022
2023
Remittances (OMR million) (LHS)
CHAPTER V
Foreign Trade
Merchandise Balance
Trade openness, defined as the sum of
exports (f.o.b) and imports (c.i.f) in terms of
GDP, slightly decreased to 90.3 percent in
2023 from 93.7 percent in 2022 (Chart 5.4).
Trade values witnessed a larger contraction
vis-à-vis nominal GDP primarily due to the
contraction in the price of oil and other related
commodities (Table 5.2). In nominal terms,
total merchandise exports (f.o.b) decreased
noticeably by 10.7 percent during 2023.
However, exports remained to be the mainstay
of domestic production with a share of 54.2
percent of GDP. The decrease in merchandise
exports was driven by hydrocarbon exports.
The contraction in hydrocarbon exports
was mainly due to lower crude oil and gas
prices, which went down by 13.7 percent
and 20.3 percent in 2023, respectively. As a
result, the contribution of oil and gas exports,
including refined oil, in total merchandise
exports decreased to 60.6 percent in 2023 as
compared with 65.2 percent a year ago.
On the other hand, non-hydrocarbon exports
remained at similar levels to 2023, while imports
increased by 1.2 percent in 2023 due to higher
demand.
As a result of a contraction in exports
compared to a slight growth in imports, the
merchandise trade surplus declined by 23.9
percent in 2023 (Chart 5.5). In absolute terms,
exports (including re-exports) decreased
by OMR 2,711 million while the increase in
imports (c.i.f) during the year was OMR 181.1
million, leading to a decline in trade surplus
by OMR 2,892.1 million in 2023.
Imports (c.i.f) remained high in 2023,
marginally increasing by 0.5 percent to
reach OMR 14,952.6 million (Table 5.4).
Most notably imports of “Machinery and
Mechanical Appliances” and “Vehicles,
Aircrafts, Vessels” increased by 8.4 percent
and 12.3 percent, respectively.
The decrease in exports during 2023 was on
account of hydrocarbon exports, whereas
non-hydrocarbon exports remained close to
last year levels. On the other hand. the value
of oil (including refined oil) exports declined
by 17.2 percent in 2023, primarily due to the
decline in prices and the relatively stable
volume of oil exports. The production of oil
during 2023 was 2.4 percent lower, year
on year amid the commitment to OPEC+
agreement.
Chart 5.4: Degree of Trade Openness
100
90
80
Percent
70
60
50
40
30
20
10
0
2019
2020
2021
Degree of Openness (Exports plus Imports as % of GDP)
EXTERNAL SECTOR DEVELOPMENTS
2022
2023
Oil and Gas Exports as % of Total Exports
95
Similarly, the value of gas exports witnessed
a decline of 15.7 percent in 2023 due to
moderation in liquified natural gas (LNG)
production and a sizable drop in prices.
Exports of non-hydrocarbon goods declined
marginally by 1.1 percent to OMR 7,442.3
million in 2023 (Table 5.3). The volume of the
same improved by 3.4 percent during the
year, while the corresponding unit value index
declined by 4.3 percent in 2023 (Chart 5.6).
Developments in non-hydrocarbon exports
were mixed with the most notable changes
occurring with a 31.3 percent decline in
“Products of The Chemicals” exports, a 21.8
percent decrease in “Plastics and Articles
Thereof”, while “Mineral Products” exports
went up by 20.9 percent.
In contrast, Oman’s total re-exports during
2023 grew by 12.8 percent with mixed
developments among major re-export items
during the year.
Oman’s main trading partners in terms of
non-oil exports, were Saudi Arabia, UAE and
India representing shares from the total of
14.1 percent, 12.7 percent and 10.7 percent,
respectively. For re-exports, the three main
destinations were UAE, Iran and Saudi Arabia
with shares of 33.1 percent, 15.4 percent
and 4.9 percent, respectively. While on the
imports side the top three trading partners
were UAE, Saudi Arabia and China with
shares of 26.3 percent 12.3 percent and 7.3
percent, respectively (Table 5.5).
30,000.0
30.0
25,000.0
25.0
20,000.0
20.0
15,000.0
15.0
10,000.0
10.0
5,000.0
5.0
0.0
Percent
OMR Million
Chart 5.5: Growth in Imports and Exports
0.0
2019
Exports
2020
2021
Imports (c.i.f)
2022
2023
Trade Surplus as % of GDP
Chart 5.6: Merchandise Trade
160
Base Year 2018 = 100
140
120
100
80
60
40
2019
Oil Price Index
96
2020
2021
Import Price Index
2022
2023
Non-hydrocarbon Export Price Index
CHAPTER V
Services
Primary and Secondary Income Accounts
Overall, the services account deficit
narrowed by 23.6 percent in 2023 reaching
OMR 2,502.2 million. The lower deficit for
the year was attributed to the recovery in
export of services of various activities, such
as transport, travel, and operational leasing
services. Additionally, the increase on the
import side of the services account was less
pronounced at 2.6 percent, reaching OMR
4,707.3 million in 2023. The trend in overall
services exports reverted back to pre-covid
levels, mainly driven by the resumption of
services activities across sectors, particularly
in the transportation and travel sectors.
The deficit in the transport account under
services contracted by 21.4 percent in 2023,
due to a more pronounced increase on the
credit side that offset the slighter increase
in air transportation debits. Similarly, the
deficit in the travel account also narrowed
due to a 73.6 percent surge on the credit
side, reaching OMR 962.1 million in 2023.
The outcome of the travel account was
induced by strong recovery in inbound
tourism during the year. The construction
services debits, in line with sector growth,
increased marginally by 2.3 percent,
reaching OMR 188.8 million.
The insurance and pension services
deficit expanded by 5.2 percent in 2023,
reflecting growth in claims abroad and
higher cost of insurance. On the other
hand, financial services deficit narrowed
by 9.6 during the same year. The deficit
in telecommunications, computers, and
information services also declined in 2023,
mainly due to growth in exports of services.
The primary income deficit contracted
EXTERNAL SECTOR DEVELOPMENTS
showing a significant improvement. The
deficit narrowed by 44 percent in 2023
compared to 2022, primarily driven by the
reduction of cost of debt for government
and SOEs, and the higher returns on equity
assets. In 2023, the investment income credit
surged by 62.3 percent to OMR 594.9 million
from OMR 366.5 million in 2022, mainly due
to increased interest received by deposittaking
corporations
from
nonresidents
under other investment, which rose to OMR
253 million during the year from OMR 94.1
million in 2022. Additionally, both direct and
portfolio investments income increased
significantly owing to higher dividends
received by quasi-corporations.
Likewise, the debit side of investment income
experienced a decline by 34 percent mainly
because of reduced dividend payments
compared with 2022 levels, mainly under
direct
investment.
Other
Investment
debits also decreased noticeably by 26.7
percent driven by the government debt
restructuring plan that reduced the cost
of debt on external Eurobonds and Sukuk.
The
secondary
income,
which
mainly
constitutes workers remittances, increased
by 4 percent reflecting the increase in
number of expatriate labor that is required
for advancing economic growth and
development under Oman Vision 2040.
97
Financial Account
The surplus in the current account balance
(CAB) over the past two years corresponded
to the positive net lending position of Oman
with the rest of the world, as indicated by
the financial account. In 2023, the current
account surplus was matched with an
outflow of OMR 1,226.6 million in the financial
account compared with an outflow of OMR
1,198 million in 2022 (Table 5.6). Foreign direct
investment recorded a net inflow during
2023, while portfolio investment and other
investment witnessed a net outflow during
the year. Reserve assets combined (CBO plus
government) increased by OMR 245 million
during 2023.
Foreign direct investment registered higher
net inflow of OMR 4,650.1 million in 2023
compared with the net inflow of OMR
2,759.3 million last year. Net acquisition of
financial assets under FDI increased by OMR
151.9 million. Alternatively, the large foreign
investments in the oil and gas exploration
sector contributed to a significant increase
in FDI net incurrence of liabilities, amounting
to OMR 4,802 million in 2023.
Portfolio investment recorded a higher
net outflow of OMR 3,065 million in 2023
compared with the net outflow of OMR
556.2 million in 2022. Net acquisition of
financial assets under portfolio investment
witnessed a reversal with net inflow of OMR
250.7 million during 2022 turning into a
net outflow of OMR 1,468.1 million, mainly
98
driven by banks and non-banking financial
companies’ higher investments abroad.
The net incurrence of liabilities outflows
grew to OMR 1,596.9 million in 2023 against
OMR 806.9 million in the previous year, as
the government continues to pay off a
large amount of its issuances of external
Eurobonds and Sukuk. In addition, Banks
also managed to pay off its high-interest
external debt securities.
Other investment witnessed a reduced
net outflow of OMR 2,567 million in 2023
compared with OMR 3,992 million in 2022. For
the year, net acquisition of financial assets
increased by OMR 1,004.3 million and the
net incurrence of liabilities declined by OMR
1,562.7 million due to a significant repayment
of loans by the government and corporates.
Reserve assets went up by OMR 245 million
during 2023 as against the decline of OMR 590
million in the previous year. The outstanding
position of the total foreign assets of CBO
slightly decreased by 0.6 percent from 2022
to reach OMR 6,734.1 million at the end
of 2023 (Chart 5.7). CBO’s foreign assets
declined by OMR 69 million during the year
(excluding valuation and exchange rate
changes). The government foreign assets
held by OIA increased by OMR 313.5 million
in 2023 compared with OMR 209.3 million last
year (excluding valuation and exchange
rate changes).
CHAPTER V
Chart 5.7:Overall BoP Surpluses and CBO’s Foreign Exchange Reserve Levels
9000
7000
5000
3000
1000
-1000
2019
2020
2021
2022
2023
-3000
-5000
Overall Surplus Balance (during the Year)
CBO's Foreign Exchange Reserves (End of the Year)
Foreign Direct Investment
The provisional figures released by the National
Center for Statistics and Information (NCSI)
showed the outstanding stock of foreign
direct investment at OMR 25,412.1million
at the end of Q4 2023 compared to OMR
20,592.6 million at the end of 2022, recording
an increase of 23.4 percent. The oil and gas
exploration sector accounted for the largest
proportion of the total FDI at 76.8 percent in
2023. Foreign investments in this sector stood
at to OMR 19,523.8 million at the end of Q4
2023 compared with OMR 14,638.9 million at
the end of 2022, recording an annual increase
of 33.4 percent. The manufacturing sector
was the second highest recipient of FDI with
an 8.5 percent share out of total FDI, followed
EXTERNAL SECTOR DEVELOPMENTS
closely by the financial intermediation sector
with a 5.3 percent share out of total FDI. Real
estate renting and business activities made
up 4 percent of total FDI and the remaining
5.4 percent of foreign investments was
reported under other sectors (Chart 5.8).
In terms of FDI by country, United Kingdom
was the top investor with total investments of
OMR 12,679.3 million at the end of Q4 2023,
accounting for 49.9 percent of the total FDI.
It was succeeded by the United States at 17
percent share with investments amounting
to OMR 4,325.1 million. China followed with
investments of OMR 1,427.7 million at the end
of 2023 (Chart 5.9).
99
Chart 5.8: FDI by sector (Position) Million OMR
1,347.6
Oil & Gas
Manufacturing
1,035.7
2,163.2
Financial Intermediation
19,523.8
2,377.5
Real Estate- Renting & Business
activitied
1,341.8
Other
Chart 5.9: FDI by countries (Position) Million OMR
998.6
United Kingdom
United States of America
United Arab Emirates
1,147.6
359.5
416.2
4,325.1
325.5
354.5
181.9
1427.7
Kuwait
Bahrain
5160.3
Qatar
Netherlands
India
Switzerland
12,679.3
3196.2
China
Other
International Investment Position (IIP)
Oman International Investment Position
recorded a net inflow of OMR 10,393.1 million at the end of 2023 as against an inflow
of OMR 12,098.5 at the end of last year
(Table 5.7). The stock of foreign assets rose
by 9 percent to OMR 40,825.5 million at the
end of 2023 compared with OMR 37,443.3
million at the end of 2022. This increase in
foreign assets was attributed to developments in the portfolio investment which increased by 26.9 percent as a result of larger
investments abroad by the financial sector.
The stock of foreign liabilities reached OMR
51,218.7 million at the end of 2023 compared with OMR 49,541.8 million at the end
100
of 2022, recording an annual increase of 3.4
percent. The increase was due to the growth
of the foreign direct investment by 23.2 percent, while both the portfolio investment
and other investment recorded a decline of
9.2 percent and 13.1 percent, respectively.
The decline reflected early repayments by
government and SOEs of foreign securities
and loans; part of an agenda of fiscal reforms and enhancing the debt structure of
the economy. Accordingly, the net IIP fell by
14.1 percent in 2023 remaining at an inflow
position, but at a lower share of GDP by 3.3
percentage points compared to the previous year (Charts 5.10 and 5.11).
CHAPTER V
Chart 5.10 International Investment Position
60,000
40,000
OMR Million
20,000
0
2019
2020
2021
2022
2023
-20,000
-40,000
-60,000
Assets: FDI
Assets: Portfolio
Assets: Other
CBO reserve assets
Govt resreve assets
Liabilities: FDI
Liabilities: Portfolio
Liabilities: Other
Net IIP
Chart 5.11: Net International Invetment Position as Percent of GDP
0%
0
2019
2020
2021
2022
2023
-2000
-10%
-4000
-6000
-20%
-8000
-10000
-30%
-12000
-40%
-14000
Net IIP
EXTERNAL SECTOR DEVELOPMENTS
As percent of GDP
101
Box 5.1: Implications of the Red Sea Disruption on Oman’s International Trade
The global economic environment has remained challenging since Q1 2022, characterized by a series of economic and political events that have led to a slowdown
in trade activity. This slowdown is exacerbated by increased geopolitical tensions
in the Middle East, stemming from attacks
on shipping vessels moving through the
Red Sea.
Amidst the recent security tensions in
the Red Sea at the beginning of 2024,
there were anticipations of an impact on
Oman’s maritime trade driven from the
proximity of the ports to the events sug-
gesting further attention toward the developments in the region. However, Oman’s
trade continued to maintain a positive
growth trajectory.
At its peak, the Red Sea facilitated the
movement of 30%1 of global container
traffic and maritime trade. It is the shortest
maritime route between Asia and Europe.
The ongoing geopolitical tension in 2024,
has forced shipping companies to use an
alternate route to Africa around the Cape
of Good Hope (Chart 5.1.1) that resulted
in an increase in shipping costs globally
(Chart 5.1.2).
Chart 5.1.1. Daily Transit Trade Volume
(million metric tonnes, 7-day moving average)
9.0
8.0
7.0
6.0
(US $ per barrel)
(Percent)
5.0
4.0
3.0
2.0
1.0
24
Ju
-2
n-
4
4
M
ay
pr
A
ar
M
-2
4
-2
24
b-
24
n-
Bab el-Mandeb
Fe
3
Ja
D
N
ov
ec
-2
-2
3
3
-2
ct
23
Se
p-
-2
Suez Canal
O
3
3
ug
A
Ju
Ju
n-
l-2
23
3
-2
pr
ay
M
M
A
ar
-2
-2
3
3
0.0
Cape of Good Hope
Source: IMF Port Watch
Chart 5.1.2. World Container Index - $/40 Foot Container
Drewry
12,000.0
Red Sea Disruption
10,129.7
(Percent)
10,000.0
8,000.0
6,000.0
5,868.4
3,964.2
4,000.0
1,341.6
2,000.0
Jul-24
Apr-24
Jan-24
Oct-23
Jul-23
Apr-23
Jan-23
Oct-22
Jul-22
Apr-22
Jan-22
Oct-21
Jul-21
Apr-21
Jan-21
Oct-20
Jul-20
Apr-20
Jan-20
Oct-19
Jul-19
Apr-19
Jan-19
-
Source: Drewry World Container Index
102
CHAPTER V
The expected disruption period of trade
in the Red Sea is yet unknown, linked to
multiple geopolitical factors that were
provoked by the war on Gaza. Attempts
to resolve the disruptions up to the first
half of 2024 have been unsuccessful, and
sentiment reflects uncertainty on how
long further the disruption of shipping
through the Red Sea will be prolonged.
This has contributed to spikes in cargo
shipping reaching fourfold higher than
pre-disruption costs to above $5,500 per
40-foot container (Chart 5.1.2). Nevertheless, prices remain below levels seen
during the Covid-19 pandemic. The following points highlight the most prevalent
implications for impacted sectors:
• Shipping firms stand to gain in terms of
profitability as container rates have risen
and firms are diverting ships from the Red
Sea to the Cape of Good Hope. Previous
excess capacity of ships is also expected to be reduced, to serve increased
demand for shipping because of longer
routes. These risks further upward supply
side pressure on future shipping prices
and vessel availability shall the disturbances continue.
• Retailers are among the most impacted. For example, freight represents a significant share of costs for fashion retailers
and consumption goods.
• There is a risk of upward pressure on Inflation levels because of the rising shipping costs. Every round trip between Asia
and Europe through the Cape of Good
Hope that involves rerouting ships is predicted to incur additional fuel expenses
of up to $1 million2 . The cost of insurance
is also expected to rise, increasing the total cost of shipments. This could rekindle
inflation concerns as a result.
• Initial reports3 from countries in Europe
and the Middle East indicate a slowdown
in import growth early 2024 likely due to
delayed shipments.
Chart 5.1.3. Shipping Activity in Oman’s Main Ports
Number of Cargo Ships Y-o-Y Comparison
749
800
734
700
606
577
600
Number of Tanker Ships Y-o-Y Comparison
450
400
350
411
282
300
250
500
400
300
158
200
85
100
0
Salalah port
200
150
100
Duqm port
Before Red Sea disrupt ion
Sohar port
50
0
Aft er Red Sea disruption
Total Trade Volume (000, Metric Tons)
9000.0
7702.7
7086.1
8000.0
7000.0
Total Trade Volume (000, Metric Tons) / Number of Ships
Salalah port
13.4 13.7
14.0
10.4 10.9
10.7
7.0
4.0
2.0
350.0
0.0
Duqm port
Before Red Sea Disruption
Sohar port
Aft er Red Sea disruption
6.0
1777.5
1000.0
58
Duqm port
8.0
3281.5
3000.0
2000.0
Salalah port
64
16.0
10.0
4688.9
5000.0
4000.0
108
Before Red Sea disrupt ion
12.0
6000.0
107
Sohar port
Aft er Red Sea Disruption
0.0
Salalah port
Duqm port
Before Red Sea Disruption
Sohar port
Aft er Red Sea Disruption
Source: IMF Port Watch Data and Authors’ Calculations
*Before red sea disruption is the period 15th November 6-2022th May 2023. After the Disruption is 15th November 6-2023th May 2024.
According to the BBC, trips through the Suez Canal route for large cargo ships from East Asia to Europe usually take 45-30 days and cost
up to 3.5$ million. The rerouting through Cape of Good Hope will incur additional costs on shipping companies as trips are prolonged by
10-8 days.
2
Refer to IMF blog on Red Sea Attacks Disrupt Global Trade published on March 2024 ,7. https://www.imf.org/en/Blogs/Articles/07/03/2024/
Red-Sea-Attacks-Disrupt-Global-Trade
3
EXTERNAL SECTOR DEVELOPMENTS
103
Using the IMF Portwatch satellite estimate data on Oman, a year on year
comparison is made of shipping activity in the periods before and after the
start of the Red Sea attacks on the 15th
of November, 2023 (Chart 5.1.3). There is
a noticeable decline in number of ships
and trade volume indicating a decline
in activities compared to the period before the disruptions.
However, Oman’s official merchandise
trade data indicates that trade has
been affected to a lesser extent than
the Portwatch data4 .
Customs trade figures reflect strong
growth in the value of trade activity.
Imports, non-oil exports and re-exports
increased by 7.2 percent, 16.3 percent
and 22.0 percent in the first 4 months
of 2024 compared to the same period
in 2023 (Table 5.1.1). Notably, several
other important developments have
been unfolding parallelly, distorting the
impact of the disruptions on the value
of trade. The ramping of operations in
Duqm refinery significantly contributed
higher Mineral Products exports representing 69% of the increase till April
2024. Additionally, higher insurance and
freight costs are driving up the value of
international trade.
Another factor that assisted in taming
the effect of the disruption is that 63.5%
of total maritime trade for Oman goes
through Sohar port, the furthest and
least exposed main port from the where
the disruptions are taking place. Moreover, the majority of trade by sea occurring is with GCC neighbors and towards
the east.
Table 5.1.1 Trade Value Jan-Apr 2023/24 (OMR Million) *
Table Names
Jan-Apr 2023
Jan-Apr 2024
% Change
Imports
4,867.0
5,216.0
7.2%
Non-Oil Exports
2,086.0
2,425.0
16.3%
Re-Exports
464.0
566.0
22.0%
Source: NCSI Figures
*Preliminary
Table 5.1.2 -Share of Total Maritime Trade by Sea Port as of December 2023
(OMR Million)
December 2023
Port Name
Value
% of Total
Sohar Free Zone Sea Port
922.6M
63.5%
Salalah Sea Port
157.8M
10.9%
Al Duqm Sea Port
307.3M
21.1%
Other Sea Ports
65.4M
4.5%
Grand Total
1,453.2M
100.0%
Source: Customs Trade Data
4
104
Portwatch data is useful for looking at general trends in a timely manner, though differences may arise due to the use of satellite estimates.
CHAPTER V
Frequent assessment to the situation
and the geopolitical tension would offer clearer insights on the developments.
Moreover, a major limitation is the challenge of singling out the impact of other major developments that have direct
impacts on trade and shipping activity.
For example, the ramping of operations
in Duqm refinery which has resulted in
a considerable jump in non-oil exports
and imports of crude oil from Kuwait. In
addition, the ongoing expansion in Salalah port, the maintenance works on the
refineries in Sohar and Mina al Fahal,
which are leading to a temporary halt in
exports of refined oil products. All in all
initial assessments of the impacts of the
disruption seem to reflect limited impact
of Oman’s merchandise trade activity in
the first half of 2024.
References and Citations
Allianz Global Investors. (2024). Red Sea
Disruptions: Impact by Sector. https://
www.allianzgi.com/en/insights/outlook-and-commentary/red-sea-disruption
BBC. (2024). Red Sea crisis: What it takes
to reroute the world’s biggest cargo ships
https://www.bbc.com/future/article/20240119-red-sea-crisis-how-globalshipping-is-being-rerouted-out-of-danger
CNN. (2024). $1 million in extra costs and
costs and weeks of delays. How the Red
Sea crisis is upending global trade.
https://edition.cnn.com/2024/02/08/
business/red-sea-crisis-global-trade-explained/index.html
EXTERNAL SECTOR DEVELOPMENTS
Federal Reserve Bank of St. Louis. (2024).
Shipping Disruptions in the Red Sea: Ripples Across the Globe.
https://www.stlouisfed.org/on-the-economy/2024/feb/shipping-disruptions-redsea-ripples-globe
International
Monetary
Fund
(IMF).
(2024). IMF Portwatch Platform. https://
portwatch.imf.org/
International
Monetary
Fund
(IMF).
(2024). Red Sea Attacks Disrupt Global
Trade. https://www.imf.org/en/Blogs/Articles/2024/03/07/Red-Sea-Attacks-Disrupt-Global-Trade
J.P. Morgan. (2024). What are the Impacts of the Red Sea Shipping Crisis.
https://www.jpmorgan.com/insights/
global-research/supply-chain/red-seashipping
Salalah
Port.
(2022).
Press
Release:
Launch of a new service to transport
goods from China to Yemen via Al Mazyona
https://salalahport.com.om/press-release-details/launch-of-a-new-serviceto-transport-goods-from-china-to-yemen-via-al-mazyona
World Economic Forum. (2024). Red Sea
Attacks: What trade experts are saying
about the shipping disruptions.
https://www.weforum.org/agenda/2024/02/red-sea-attacks-trade-experts-houthi-shipping-yemen/#:~:text=%E2%80%9CThe%20Red%20Sea%20
has%20become,%241%20trillion%20
in%20annual%20merchandise
105
Table 5.1
Nominal Effective Exchange Rate (NEER)
(1999=100)
End of year
2011
Import Weighted
92.3
Non-Weighted
89.3
2012
92.9
88.6
2013
96.2
91.1
2014
101.6
97.4
2015
105.2
104.5
2016
107.3
108.4
2017
102.1
100.7
2018
104.6
107.8
2019
105.0
110.1
101.8
106.2
112.8
110.8
112.3
124.2
112.5
114.6
113.7
113.9
115.2
115.3
114.5
116.4
117.4
117.7
115.7
114.3
127.1
129.0
130.0
129.6
131.7
131.2
130.0
134.2
133.6
133.4
130.9
129.2
2020
2021
2022
Month-end (2023)
January
February
March
April
May
June
July
August
September
October
November
December
Note: A rise in the index indicates an appreciation of the Rial.
Source: Central Bank of Oman.
Table 5.2 Merchandise Trade
(Rial Omani Million)
2020
Imports (c.i.f.)
8,788.4
10,896.6
12,039.2 14,927.6 15,108.7
1.2
Exports (f.o.b.)
14,860.3
12,861.2
17,048.8 25,401.4 22,690.4
-10.7
Crude Oil
7,555.9
5,053.6
7,184.8
11,656.4
9,833.7
-15.6
Refined Oil
929.1
632.1
1,104.8
1,845.9
1,350.5
-26.8
LNG
Non-Hydrocarbon
1,710.1
1,310.0
1,662.8
3,057.2
2,576.7
-15.7
3,230.6
4,092.7
5,777.7
7,523.8
7,442.3
-1.1
Re-exports
1,434.6
1,772.9
1,318.7
1,318.1
1,487.2
12.8
Trade Balance
(Exports+Imports) as % of GDP
Trade Balance as % of GDP
6,071.9
1,964.6
5,009.6
10,473.8
7,581.8
-27.6
69.8
81.4
86.6
93.7
90.3
-3.6
18.0
6.8
15.1
22.2
18.1
-18.5
13.8
20.1
21.0
20.0
17.8
-11.0
Total Non-oil Exports as % of GDP*
2021
2022
2023
% Change
2023/22
2019
The coverage of both exports and imports was expanded in 2020, due to which it may not be strictly comparable with the previous year.
Import figures in some other tables which may relate only to recorded imports. Similarly, import figures in this table are on c.i.f. basis, and, therefore, may not tally with import and trade balance figures in other tables where imports could be on f.o.b. basis.
Source: Directorate General of Customs and National Center for Statistics & Information.
106
CHAPTER V
Table 5.3
Value and Quantity of Exports / Imports
Non-oil Exports of Omani Origin*
Year
Re-Exports
Recorded Imports
Oil Exports
Value
(R.O.
Million)
Weight
(000)
Tonnes
Value
(R.O.
Million)
Weight
(000)
Tonnes
Value
(R.O.
Million)
Weight
(000)
Tonnes
Million
Barrels
Avg. Price
US $/Barrel
2002
261.6
1727.8
726.7
475.2
2309.1
4901.0
306.2
24.3
2003
304.1
1973.0
600.8
492.1
2527.0
5643.1
287.7
27.8
2004
420.3
2167.8
538.3
300.3
3313.8
5713.7
263.6
34.4
2005
555.3
3013.1
583.9
338.8
3394.5
5566.9
262.1
50.3
2006
812.5
5488.1
766.9
318.2
4190.1
5822.7
233.2
61.7
2007
1290.7
6335.1
1003.5
338.7
6146.5
7398.7
222.0
65.2
2008
1962.9
10156.9
1515.8
608.3
8813.1
10476.3
216.7
101.1
2009
1849.5
11340.3
1834.8
1245.4
6862.7
9431.8
242.9
56.7
2010
2448.2
24052.9
1921.7
1143.7
7590.1
12826.9
271.8
76.6
2011
3033.2
31775.3
2247.6
2129.7
9081.8
15651.8
269.4
103.0
2012
3594.1
15921.1
2486.3
2572.6
10811.3
17865.5
279.8
109.6
2013
3806.9
30237.6
3541.4
3940.6
13201.0
29746.6
299.3
105.5
2014
4125.5
18731.3
2944.1
2887.2
11267.7
23175.3
292.2
103.2
2015
3003.9
14902.0
2571.6
2217.4
11153.3
35570.4
308.1
56.5
2016
2398.7
19016.1
2056.3
3005.7
8900.2
41845.0
321.9
40.1
2017
3176.4
40013.5
2102.1
3183.5
9937.5
33724.0
294.2
51.3
2018
3727.1
40290.9
1831.5
1931.2
9703.7
30585.0
289.3
69.7
2019
3230.6
53402.9
1434.6
1992.9
8788.4
32493.7
310.3
63.6
2020
4096.5
60543.2
1772.9
1268.2
10896.6
33949.2
287.0
46.0
2021
5777.7
60786.7
1318.7
961.1
12039.2
37927.5
289.0
64.3
2022
7523.8
68099.0
1318.1
915.0
14927.6
43761.6
318.0
95.4
2023
7442.3
70411.8
1487.2
1416.3
15108.7
42744.5
310.3
82.3
*Excludes re-exports.
Source: Directorate General of Customs, National Center for Statistics & Information and Ministry of Oil and Gas.
EXTERNAL SECTOR DEVELOPMENTS
107
Table 5.4
Composition of Trade by Components
Value of Non-oil Exports of Omani Origin*
(Rial Omani Million)
2019
2020
2021
2022
2023*
% Change
2023/22
BASE METALS AND ARTICLES OF BASE METAL
855.6
895.6
1327.0
1473.5
1318.5
-10.5%
LIVE ANIMALS, ANIMAL PRODUCTS
199.9
255.0
258.0
321.1
393.7
22.6%
MACHINERY AND MECHANICAL APPLIANCES
113.9
187.0
214.7
157.6
369.9
134.7%
MINERAL PRODUCTS
373.2
454.8
842.1
2331.5
2819.2
20.9%
PLASTIC AND ARTICLES THEREOF
196.0
509.7
884.8
1123.2
878.5
-21.8%
PREPARED FOODSTUFFS
147.5
196.5
213.4
199.8
213.2
6.7%
PRODUCTS OF THE CHEMICALS
856.5
744.6
1234.5
1456.3
1000.0
-31.3%
VEGETABLE PRODUCTS
69.1
80.8
78.0
82.1
77.0
-6.2%
VEHICLES, AIRCRAFTS, VESSELS*
182.3
436.2
347.4
16.6
22.3
34.4%
Others
236.6
332.3
377.8
362.1
350.1
-3.3%
Total
3230.6
4092.7
5777.7
7523.8
7442.3
-1.1%
2019
2020
2021
2022
2023*
% Change
2023/22
BASE METALS AND ARTICLES OF BASE METAL
55.4
89.5
28.0
31.7
33.8
6.4%
LIVE ANIMALS, ANIMAL PRODUCTS
20.7
24.7
67.2
64.4
108.4
68.3%
MACHINERY AND MECHANICAL APPLIANCES
331.8
334.2
250.1
338.5
397.8
17.5%
MINERAL PRODUCTS
69.5
42.7
37.8
62.5
99.2
58.7%
PLASTIC AND ARTICLES THEREOF
28.6
20.6
24.5
28.9
50.5
74.9%
PREPARED FOODSTUFFS
217.7
88.2
129.8
145.3
140.8
-3.1%
PRODUCTS OF THE CHEMICALS
44.8
30.0
50.1
30.7
33.4
9.0%
VEGETABLE PRODUCTS
18.2
22.6
30.4
28.7
21.3
-25.9%
VEHICLES, AIRCRAFTS, VESSELS*
454.2
842.5
544.5
383.5
403.5
5.2%
Others
207.9
277.9
156.2
204.0
198.6
-2.7%
Total
1448.8
1772.9
1318.7
1318.1
1487.2
12.8%
2019
2020
2021
2022
2023*
% Change
2023/22
BASE METALS AND ARTICLES OF BASE METAL
1255.7
1406.3
1511.1
1567.2
1589.9
1.4%
LIVE ANIMALS, ANIMAL PRODUCTS
511.0
521.0
577.4
686.1
638.8
-6.9%
MACHINERY AND MECHANICAL APPLIANCES
2018.2
2439.0
1989.7
2102.2
2278.7
8.4%
MINERAL PRODUCTS
555.0
1275.2
2181.6
4295.6
4225.1
-1.6%
PLASTIC AND ARTICLES THEREOF
401.6
406.0
466.1
515.7
501.6
-2.7%
PREPARED FOODSTUFFS
540.4
533.3
605.4
701.0
694.8
-0.9%
PRODUCTS OF THE CHEMICALS
759.7
988.0
1149.0
1564.2
1472.2
-5.9%
VEGETABLE PRODUCTS
434.4
599.0
677.5
620.5
592.6
-4.5%
VEHICLES, AIRCRAFTS, VESSELS*
691.2
1260.3
1215.8
1189.4
1335.7
12.3%
Others
1325.0
1326.2
1533.1
1639.4
1623.2
-1.0%
Total
8492.2
10754.3
11906.7
14881.2
14952.6
0.5%
Composition of Re-exports
Composition of Recorded Imports
*Excludes re-exports.
Source: Directorate General of Customs and National Center for Statistics & Information.
108
CHAPTER V
Table 5.5
Non-oil Trade by Country
2021
Country
Bahrain
Kuwait
Qatar
Saudi
Arabia
UAE
China
India
USA
Brazil
Iran
Japan
Singapore
Egypt
South
Africa
Others
Grand
Total
Non-Oil
Exports
2022
Re-Exports
Imports
Non-Oil
Exports
2023
Re-Exports
Imports
Non-Oil
Exports
Re-Exports
Imports
Value
41.3
3.7
278.4
64.3
4.9
354.4
41.6
6.8
199.1
% Share
%0.7
%0.3
%2.3
%0.9
%0.4
%2.4
%0.6
%0.5
%1.3
Value
89.5
34.1
115.0
71.8
43.2
131.8
90.5
73.9
669.5
% Share
%1.5
%2.6
%1.0
%1.0
%3.3
%0.9
%1.2
%5.0
%4.5
Value
253.9
128.1
764.9
343.4
47.4
913.4
236.6
48.1
830.4
% Share
%4.4
%9.7
%6.4
%4.6
%3.6
%6.1
%3.2
%3.2
%5.6
Value
566.3
98.4
561.3
857.5
64.2
1780.5
1047.4
83.2
1844.9
% Share
%9.8
%7.5
%4.7
%11.4
%4.9
%12.0
%14.1
%5.6
%12.3
Value
986.5
491.2
4238.3
771.8
436.7
4312.4
942.5
502.2
3935.0
% Share
%17.1
%37.3
%35.6
%10.3
%33.1
%29.0
%12.7
%33.8
%26.3
Value
377.0
16.3
832.3
227.4
13.7
1108.7
214.5
15.1
1087.5
% Share
%6.5
%1.2
%7.0
%3.0
%1.0
%7.5
%2.9
%1.0
%7.3
Value
478.5
31.5
782.1
847.5
19.6
1258.1
795.9
55.7
1068.0
% Share
%8.3
%2.4
%6.6
%11.3
%1.5
%8.5
%10.7
%3.7
%7.1
Value
631.7
22.0
275.2
830.0
40.3
393.4
433.2
83.4
519.9
% Share
%10.9
%1.7
%2.3
%11.0
%3.1
%2.6
%5.8
%5.6
%3.5
Value
114.0
0.3
579.1
74.7
0.1
445.5
78.0
0.2
470.7
% Share
%2.0
%0.0
%4.9
%1.0
%0.0
%3.0
%1.0
%0.0
%3.1
Value
4.7
150.8
98.8
4.1
203.3
113.4
1.9
210.9
122.9
% Share
%0.1
%11.4
%0.8
%0.1
%15.4
%0.8
%0.0
%14.2
%0.8
Value
13.0
0.7
473.7
12.9
0.3
466.5
36.0
0.6
489.2
% Share
%0.2
%0.1
%4.0
%0.2
%0.0
%3.1
%0.5
%0.0
%3.3
Value
154.9
9.8
112.1
216.6
23.3
186.7
165.1
14.4
93.1
% Share
%2.7
%0.7
%0.9
%2.9
%1.8
%1.3
%2.2
%1.0
%0.6
Value
145.6
12.7
60.2
292.5
5.5
95.5
374.0
16.8
124.2
% Share
%2.5
%1.0
%0.5
%3.9
%0.4
%0.6
%5.0
%1.1
%0.8
Value
117.9
0.9
22.3
324.1
0.4
26.7
554.3
0.1
22.4
% Share
%2.0
%0.1
%0.2
%4.3
%0.0
%0.2
%7.4
%0.0
%0.1
Value
1802.8
318.3
2712.9
2585.3
415.1
3294.2
2430.6
375.6
3475.8
% Share
%31.2
%24.1
%22.8
%34.4
%31.5
%22.1
%32.7
%25.3
%23.2
Value
5777.7
1318.7
11906.7
7523.8
1318.1
14881.2
7442.3
1487.2
14952.6
%
Share
%100.0
%100.0
%100.0
%100.0
%100.0
%100.0
%100.0
%100.0
%100.0
EXTERNAL SECTOR DEVELOPMENTS
109
Table 5.6 Balance of Payments (Rial Omani Million)
Items
2019
2020
2021
2022
2023 (Prel.)
Oil Prices
$63.6
$46.0
$64.3
$95.4
$82.3
Current account
-1,665
-4,830
-1,859
1,677
1,014
Credit
17,227
14,014
18,607
27,098
25,506
Debit
18,892
18,844
20,466
25,420
24,492
4,221
717
3,598
8,767
6,666
Credit
16,744
13,723
17,907
26,716
24,896
Debit
12,523
13,007
14,309
17,949
18,230
6,995
3,108
6,273
12,041
9,168
Credit
14,860
12,861
17,049
25,401
22,691
Debit
7,866
9,752
10,775
13,360
13,523
6,995
3,108
6,273
12,041
9,168
14,860
12,861
17,049
25,401
22,691
Oil
8,485
5,685
8,289
13,502
11,185
Crude Oil
7,556
5,054
7,185
11,656
9,834
Refined Oil
929
632
1,105
1,846
1,351
Gas
1,710
1,310
1,663
3,057
2,577
Non-oil Exports
3,231
4,093
5,778
7,524
7,442
Re-exports
1,435
1,773
1,319
1,318
1,487
Debit (Imports F.o.B)
7,866
9,752
10,775
13,360
13,523
Services
-2,774
-2,392
-2,676
-3,274
-2,502
Credit
1,883
862
858
1,315
2,205
Debit
4,657
3,254
3,534
4,589
4,707
Transport
-769
-938
-1,103
-1,455
-1,144
Credit
912
422
389
441
802
Debit
1,681
1,360
1,492
1,896
1,946
-317
-125
-244
-320
-133
Credit
696
175
155
554
962
Debit
1,013
300
399
874
1,095
Construction
-411
-198
-166
-169
-175
Credit
15
15
15
15
14
Debit
426
213
181
185
189
-398
-420
-418
-464
-489
Credit
16
15
22
25
26
Debit
414
435
441
489
515
-129
-134
-131
-145
-131
Credit
6
6
7
7
8
Debit
136
140
137
152
140
-92
-106
-96
-160
-79
Credit
85
91
93
100
141
Debit
177
197
189
260
220
Goods and services
Goods
General merchandise on a balance
of payments basis
Credit
Travel
Insurance and pension services
Financial services
Telecommunications, computer,
and information services
110
CHAPTER V
Continued - Table 5.6 Balance of Payments (Rial Omani Million)
Items
2019
2020
2021
2022
2023 (Prel.)
Other business services
-658
-470
-518
-560
-351
Credit
152
139
178
173
251
Debit
811
609
696
733
603
Primary income
-2,355
-2,156
-2,318
-3,585
-2,006
Credit
483
291
700
382
610
Debit
2,838
2,447
3,018
3,966
2,616
15
15
15
15
15
Credit
15
15
15
15
15
Debit
0
0
0
0
0
-2,370
-2,171
-2,333
-3,600
-2,021
Credit
468
276
685
367
595
Debit
2,838
2,447
3,018
3,966
2,616
-1,737
-1,264
-1,518
-1,882
-876
Credit
33
18
17
89
132
Debit
1,770
1,283
1,535
1,971
1,007
-159
-261
155
-457
-405
Credit
255
163
610
184
210
Debit
414
424
455
641
615
-474
-645
-970
-1,261
-740
Compensation of employees
Investment income
Direct investment
Portfolio investment
Other investment
Credit
180
94
58
94
253
Debit
654
740
1,028
1,355
993
-3,531
-3,391
-3,139
-3,505
-3,646
Credit
0
0
0
0
0
Debit
3,531
3,391
3,139
3,505
3,646
-3,512
-3,373
-3,121
-3,488
-3,627
Credit
0
0
0
0
0
Debit
3,512
3,373
3,121
3,488
3,627
-3,512
-3,373
-3,121
-3,488
-3,627
Credit
0
0
0
0
0
Debit
3,512
3,373
3,121
3,488
3,627
36
69
15
4
-2
Credit
55
80
24
14
12
Debit
19
11
8
10
14
36
69
15
4
-2
Credit
55
80
24
14
12
Debit
19
11
8
10
14
-1,629
-4,761
-1,844
1,681
1,012
Secondary income
Financial corporations, nonfinancial
corporations, households, and NPISHs
Personal transfers
Capital account
Capital transfers
Net lending (+) / net borrowing (-)
(balance from current and capital
account)
EXTERNAL SECTOR DEVELOPMENTS
111
Continued - Table 5.6
Balance of Payments (Rial Omani Million)
Items
2019
2020
2021
2022
2023 (Prel.)
Financial account
-1,664
-4,392
-2,218
1,198
1227
Net lending (+) / net borrowing (-)
(balance from financial account)
-1,664
-4,392
-2,218
1,198
1227
Direct Investment
-994
-1,056
-2,909
-2,759
-4650
Net acquisition of financial assets
-225
-322
454
-82
152
Net incurrence of liabilities
768
734
3,363
2,677
4,802
Portfolio Investment
-744
-694
-1,532
556
3,065
Net acquisition of financial assets
377
520
392
-251
1,468
Equity and investment fund shares
117
734
644
-237
355
Deposit-taking corporations, except
central bank
0
0
0
0
0
Other sectors
117
734
644
-237
355
Debt securities
261
-214
-252
-14
1,113
Deposit-taking corporations, except
central bank
23
26
-343
38
875
Other sectors
238
-240
90
-52
238
Net incurrence of liabilities
1,121
1,215
1,924
-807
-1,597
Equity and investment fund shares
228
432
196
111
-371
Deposit-taking corporations, except
central bank
8
-28
-104
20
-15
Other sectors
220
460
300
91
-356
Debt securities
893
783
1,728
-918
-1,226
Deposit-taking corporations, except
central bank
-133
11
2
-129
-276
Government
1,026
772
1,208
-654
-774
Other sectors
0
0
519
-135
-176
Other Investment
610
-1,838
1,035
3,992
2,567
Net acquisition of financial assets
1,724
-898
1,216
2,079
1,004
Currency and deposits
269
-652
362
130
511
Trade credit and advances
175
100
150
140
-68
Loans
-18
-152
-7
52
39
Other accounts receivable
1,298
-194
711
1,757
522
Net incurrence of liabilities
1,114
940
181
-1,913
-1,563
Currency and deposits
477
-80
569
-335
127
Trade credit and advances
-164
-183
-150
87
113
Loans
819
1,173
-458
-1,553
-1,745
Other accounts receivable
-17
27
-58
-93
-61
Special drawing rights (Net incurrence of
liabilities)
-1
4
278
-19
3
Reserve assets
-536
-803
1,188
-590
245
Central Bank
-313
-720
1,767
-800
-69
Government
-223
-83
-578
209
313
Net errors and omissions
-35
369
-374
-483
214
Note: Based on improved reporting of information through the annual survey, data in respect of foreign direct investment, other investment, and investment income flows have been revised considerably for past years. Since the coverage of the survey increases every
year, with new respondents reporting data for past few years as well, this annual revision process may continue till the survey becomes
comprehensive with full coverage.
* Source: Central Bank of Oman 2023
112
CHAPTER V
Table 5.7
International Investment Position (IIP)
(RO Million)
Items
2019
2020
2021
2022
2023
(Prel.)
% Change
2022/21
2023/22
IIP (NET)
-6,116
-10,213
-12,639
-12,099
-10,393
-4.3
-14.1
A. Assets
34,452
33,371
36,778
37,443
40,826
1.8
9.0
1. Direct investment
2,369
2,047
2,501
2,297
2,449
-8.1
6.6
2. Portfolio investment
4,987
5,506
5,809
5,462
6,930
-6.0
26.9
2.1 Equity and investment fund shares
3,164
3,897
4,452
4,119
4,475
-7.5
8.6
0
0
0
0
0
0
0
2.1.2 Other sectors
3,164
3,897
4,452
4,119
4,475
-7.5
8.6
2.2 Debt securities
1,823
1,609
1,357
1,343
2,456
-1.0
82.9
2.2.1 Deposit-taking corporations, except the
central bank
1,067
1,093
750
789
1,664
5.1
111.0
2.2.2 Other sectors
756
516
607
554
792
-8.6
42.9
3. Other investment
13,985
12,999
14,165
16,165
17,169
14.1
6.2
3.1 Currency and deposits
1,705
1,053
1,415
1,546
2,057
9.2
33.1
3.2 Loans
315
163
156
209
248
33.9
18.7
3.3 Trade credit and advances
508
520
620
680
612
9.7
-10.0
3.4 Other accounts receivable
11,457
11,263
11,974
13,730
14,253
14.7
3.8
4. Reserve assets
13,111
12,819
14,303
13,519
14,277
-5.5
5.6
4.1 Central Bank
6,407
5,771
7,587
6,775
6,734
-10.7
-0.6
4.2 Government Reserves
6,704
7,048
6,717
6,744
7,542
0.4
11.8
B. Liabilities
40,568
43,585
49,417
49,542
51,219
0.3
3.4
1. Direct investment
13,721
14,479
17,967
20,699
25,492
15.2
23.2
2. Portfolio investment
14,539
15,726
17,727
16,917
15,363
-4.6
-9.2
2.1 Equity and investment fund shares
3,953
4,357
4,631
4,738
4,410
2.3
-6.9
2.1.1 Deposit-taking corporations, except the
central bank
276
247
143
163
148
13.7
-9.3
2.1.2 Other sectors
3,677
4,110
4,488
4,576
4,263
2.0
-6.8
2.2 Debt securities
10,586
11,369
13,097
12,179
10,953
-7.0
-10.1
2.2.1 Deposit-taking corporations, except the
central bank
814
825
826
698
422
-15.6
-39.6
2.2.2 General government
8,427
9,199
10,407
9,753
8,979
-6.3
-7.9
2.2.3 Other sectors
1,345
1,345
1,864
1,728
1,553
-7.3
-10.2
3. Other investment
12,308
13,380
13,723
11,926
10,363
-13.1
-13.1
3.1 Currency and deposits
3,248
3,168
3,736
3,401
3,529
-9.0
3.7
3.2 Loans
7,352
8,524
8,066
6,513
4,768
-19.3
-26.8
3.3 Trade credit and advances
424
384
395
542
655
37.1
20.8
3.4 Other accounts payable
1,189
1,205
1,148
1,111
1,050
-3.2
-5.5
95
99
377
359
362
-4.9
0.8
2.1.1 Deposit-taking corporations, except the
central bank
3.5 Special drawing rights
EXTERNAL SECTOR DEVELOPMENTS
113
CHAPTER
CENTRAL BANK ACCOUNTS
ANNUAL REPORT
Independent auditor’s report
to the Board of Governors of
Central bank of Oman
Opinion
We have audited the financial statements of Central Bank of Oman (“the Bank”), which comprise the
statement of financial position as at 31 December 2023, income statement, statement of changes
in capital and reserves and statement of cash flows for the year then ended, and notes, comprising
significant accounting policies and other explanatory information.
In our opinion, the accompanying financial statements are prepared in all material respects, in
accordance with the accounting policies of the Bank described in note 2 to the financial statements
and the Banking Law Royal Decree 14/2000.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs).
Our responsibilities under those standards are further described in the Auditors’ Responsibilities for
the Audit of the Financial Statements section of our report. We are independent of the Bank in
accordance with International Ethics Standards Board for Accountants International Code of Ethics
for Professional Accountants (including International Independence Standards) (IESBA Code)
together with the ethical requirements that are relevant to our audit of the financial statements in
the Sultanate of Oman, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the IESBA Code. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter - Basis of Accounting
We draw attention to Note 2 to the financial statements, which describes the basis of accounting.
The financial statements are prepared to assist the Bank to comply with the requirements of the
Banking Law Royal Decree 114/2000. As a result, the financial statements may not be suitable for
another purpose. Our opinion is not modified in respect of this matter.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation of the financial statements in accordance with the
accounting policies of the Bank described in note 2 to the financial statements and the Banking
Law Royal Decree 114/2000, and for such internal control as management determines is necessary
to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error. In preparing the financial statements, management is responsible for assessing
the Bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Bank or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Bank’s financial reporting
process
116
Independent auditor’s report
to the Board of Governors of
Central bank of Oman (continued)
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Bank’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Bank’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditors’ report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditors’ report. However, future events or conditions may cause the Bank
to cease to continue as a going concern.
We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
KPMG
Muscat, Sultanate of Oman
7 May 2024
117
Central Bank of Oman Statement of Financial Position As
at 31 December 2023
2023
2022
ASSETS
RO’000
RO’000
Bullion
77,281
47,867
Foreign currency placements
2,820,684
2,825,492
Available-for-sale investments
3,360,137
3,433,308
128,515
105,121
Reserve tranche
74,935
66,914
Currency quota
205,865
211,598
280,800
278,512
367,033
375,471
367,033
653,983
59,975
56,614
7,094,425
7,122,385
Currency in circulation
1,589,231
1,611,537
Deposits and current accounts
3,214,293
3,429,643
Employee benefits
50,646
53,050
Other liabilities
42,523
38,699
Non-interest bearing demand notes
189,153
188,772
Other accounts
17,126
22,945
206,279
211,717
361,529
358,504
567,808
570,221
5,464,501
5,703,150
1,000,000
1,000,000
General reserve
555,281
480,116
Bond price fluctuation reserve
57,500
52,500
Currency fluctuation reserve
35,000
32,000
Currency valuation adjustment account
27,620
-11,558
Financial assets valuation adjustment account on available-for-sale investments
-60,766
-149,112
Capital in kind
15,289
15,289
Total capital and reserves
1,629,924
1,419,235
Total liabilities and capital and reserves
7,094,425
7,122,385
Reserve holdings abroad
Other assets
International Monetary Fund
Special drawing rights holdings
Property and equipment
TOTAL ASSETS
LIABILITIES
International Monetary Fund
Special drawing rights allocation
Total liabilities
CAPITAL AND RESERVES
Capital
The financial statements were approved by the Board of Governers of the Central Bank of Oman on
March 6, 2024 and were signed on their behalf by:
H.E. Tahir bin Salim bin Abdullah Al Amri
Abdulaziz Abdulrahman Said Al Manthari
The Executive President
Executive Vice President-Administration & Financial Affairs
The accompanying notes form an integral part of these financial statements.
Independent Auditors’ report is set forth on page 1 - 3
118
Central Bank of Oman
Income statement
For the year ended 31 December 2023
2023
2022
RO’000
RO’000
Interest income
227,445
96,714
Interest expense
(104,790)
(33,136)
Net interest income
122,655
63,578
Other income
12,077
25,464
Operating income
134,732
89,042
Staff costs
(24,871)
(24,105)
Currency expenses
(3,550)
(3,064)
Administrative expenses
(15,083)
(13,728)
Contribution to Pension Fund
(4,657)
(4,032)
Depreciation on premises and equipment
(3,408)
(3,841)
Total operating expenses
(51,569)
(48,770)
83,163
40,272
Operating expenses
Profit for the year
The accompanying notes form an integral part of these financial statements.
Independent Auditors’ report is set forth on page 1 - 3
119
STATISTICAL APPENDIX
ANNUAL REPORT
Table 1
Domestic and National Savings
( Rial Omani Million)
Items
2018
2019
2020
2021
2022*
1- GDP at Market Prices
35184.0
33859.4
29187.2
33576.0
43042.4
2- Total Final Consumption
19,830.4
20,527.9
20,503.9
20,625.4
22,483.6
3- Domestic Savings (1-2)
15,353.7
13,331.5
8,683.2
12,950.6
20,558.9
4- Net Factor Income (transfer)
-5747.6
-5780.5
-5431.9
-5437.0
-6776.1
5- National Savings (3-4)
9,606.1
7,551.0
3,251.3
7,513.6
13,782.7
6- Percent Of Domestic Savings to GDP (3/1)
43.6
39.4
29.8
38.6
47.8
7- Percent of National Savings to GDP (5/1)
27.3
22.3
11.1
22.4
32.0
* Provisional
The data for 2022 was not available at the time of publication of this report.
Source : National Center for Statistics and Information
Table 2
Expenditure on Gross Domestic Product at Current Market Prices
(Rial Omani Million)
Items
2018
2019
2020
2021
2022*
19830.4
20527.9
20503.9
20625.4
22483.6
Households
12217.1
12675.4
12836.7
13162.8
14753.0
Government
7585.2
7824.4
7607.9
7434.4
7702.3
Non Profit Institutions
28.1
28.2
28.2
28.2
28.2
2. Gross Capital Formation#
10728.1
9803.4
9215.7
9017.7
9698.2
Building and Construction
7904.7
7525.9
6506.8
6494.2
6981.0
Machinery and Equipment
1685.9
1090.0
1510.9
1220.1
1298.8
Intangible Fixed Assets
1137.5
1187.6
1198.0
1303.4
1418.5
Change in Inventories
416.5
-707.1
-1249.3
335.2
1872.8
3.Net Exports of Goods & Services
4209.1
4235.1
716.8
3596.9
8987.8
GDP at Market Prices
35184.0
33859.4
29187.2
33576.0
43042.4
1. Final Consumption Expenditure
* Provisional
** It does not include change in inventories.
The data for 2022 was not available at the time of publication of this report.
Source: National Center for Statistics and Information
122
STATISTICAL APPENDIX
Table 3
Structure of Interest Rates on Commercial Banks Deposits
December 2023
(Rial Omani Thousands)
Rates of
Interest
(Per Annum)
Total Rial Omani Deposits
Total Foreign Currency Deposits
Total Deposits
No of
A/Cs
%
Amount
%
No of
A/Cs
%
Amount
%
No of
A/Cs
%
Amount
%
NIL INTEREST
4,451,963
94.7
7,482,386
38.5
22,571
78.5
1,487,305
35.8
4,474,534
94.6
8,969,690
38.0
OVER 0% TO 2%
218,195
4.6
2,170,765
11.2
5,190
18.0
378,932
9.1
223,385
4.7
2,549,697
10.8
OVER 2% TO 3%
10,722
0.2
338,048
1.7
415
1.4
50,242
1.2
11,137
0.2
388,290
1.6
OVER 3% TO 4%
10,494
0.2
1,188,123
6.1
245
0.9
276,466
6.6
10,739
0.2
1,464,589
6.2
OVER 4% TO 5%
7,350
0.2
2,252,886
11.6
237
0.8
196,940
4.7
7,587
0.2
2,449,826
10.4
OVER 5% TO 6%
2,859
0.1
5,070,005
26.1
93
0.3
1,450,022
34.9
2,952
0.1
6,520,027
27.6
OVER 6% TO 7%
213
0.0
929,359
4.8
4
0.0
43,830
1.1
217
0.0
973,189
4.1
OVER 7% TO 8%
22
0.0
245
0.0
0
0.0
0
0.0
22
0.0
245
0.0
OVER 8% TO 9%
0
0.0
2,068
0.0
1
0.0
274,931
6.6
1
0.0
276,999
1.2
OVER 9% TO
10%
0
0.0
196
0.0
0
0.0
0
0.0
0
0.0
196
0.0
OVER 10% TO
11%
0
0.0
0
0.0
0
0.0
0
0.0
0
0.0
0
0.0
OVER 11% TO
12%
0
0.0
0
0.0
0
0.0
0
0.0
0
0.0
0
0.0
OVER 12%
0
0.0
0
0.0
0
0.0
0
0.0
0
0.0
0
0.0
4,701,818
100
19,434,081
100
28,756
100.00
4,158,668
100
4,730,574
100
23,592,749
100
Total
Weighted
Average Rate of
Interest (%)
2.637
3.115
2.721
Source: Central Bank of Oman
STATISTICAL APPENDIX
123
Table 4
Structure of Private Sector Time Deposits by Rate of Interest and Maturity
December 2023
(Rial Omani Thousands)
Rates of
Interest
(Per Annum)
7 Days to Less than
6 Months
6 Months to Less than
1 Year
1 Year and Above
Total
Rial
Omani
Foreign
Currency
Total
Rial
Omani
Foreign
Currency
Total
Rial
Omani
Foreign
Currency
Total
Rial
Omani
Foreign
Currency
Total
NIL INTEREST
545
0
545
545
0
545
11,870
3
11,873
12,415
15
12,430
OVER 0%
TO 2%
16,525
1,779
18,304
16,525
1,779
18,304
323,513
4,560
328,073
346,235
8,989
355,224
OVER 2%
TO 3%
43,446
8,799
52,245
43,446
8,799
52,245
19,772
10,304
30,076
76,130
19,551
95,682
OVER 3%
TO 4%
20,494
15,404
35,898
20,494
15,404
35,898
293,277
10,113
303,391
342,783
26,678
369,461
OVER 4%
TO 5%
46,443
4,269
50,712
46,443
4,269
50,712
785,296
72,339
857,635
948,891
91,928
1,040,819
OVER 5%
TO 6%
121,000
28,556
149,556
121,000
28,556
149,556
1,802,264
190,247
1,992,511
2,213,221
230,200
2,443,421
OVER 6%
TO 7%
0
0
0
0
0
0
516,780
43,830
560,610
651,803
43,830
695,633
OVER 7%
TO 8%
0
0
0
0
0
0
0
0
0
0
0
0
OVER 8%
TO 9%
0
0
0
0
0
0
108
274,931
275,039
108
274,931
275,039
OVER 9%
TO 10%
0
0
0
0
0
0
134
0
134
196
0
196
OVER 10%
TO 11%
0
0
0
0
0
0
0
0
0
0
0
0
OVER 11%
TO 12%
0
0
0
0
0
0
0
0
0
0
0
0
OVER 12%
0
0
0
0
0
0
0
0
0
0
0
0
Total
248,453
58,807
307,259
248,453
58,807
307,259
3,753,014
606,327
4,359,342
4,591,782
696,123
5,287,905
Weighted
Average
Rate of Interest (%)
4.312
4.319
4.313
4.312
4.319
4.313
4.851
6.695
5.108
4.882
6.397
5.082
Source: Central Bank of Oman
124
STATISTICAL APPENDIX
Table 5
Structure of Interest Rates on Commercial Banks Credit
December 2023
(Rial Omani Thousands)
Total R.O. Lending
Rates of Interest
(Per Annum)
Total Foreign Currency Lending
Total Lending (R.O. + Fcy.)
No of
A/Cs
%
Amount
%
No of
A/Cs
%
Amount
%
No of
A/Cs
%
Amount
%
NIL INTEREST
15,111
2.0
146,915
0.7
117
3.8
23,561
0.8
15,228
2.0
170,476
0.7
OVER 0% TO 2%
1,847
0.2
98,270
0.5
358
11.5
1,933
0.1
2,205
0.3
100,203
0.4
OVER 2% TO 4%
26,949
3.6
2,078,291
9.7
44
1.4
25,007
0.8
26,993
3.6
2,103,298
8.6
OVER 4% TO 5%
168,967
22.4
5,088,317
23.8
275
8.8
247,887
8.3
169,242
22.4
5,336,204
21.9
OVER 5% TO 7%
306,193
40.6
12,228,178
57.1
223
7.2
445,658
14.9
306,416
40.5
12,673,836
52.0
OVER 7% TO 8%
92,249
12.2
1,189,660
5.6
1,889
60.8
864,432
28.9
94,138
12.4
2,054,092
8.4
OVER 8% TO 9%
5,231
0.7
192,454
0.9
137
4.4
1,093,332
36.6
5,368
0.7
1,285,787
5.3
OVER 9% TO 10%
491
0.1
61,889
0.3
16
0.5
212,339
7.1
507
0.1
274,228
1.1
OVER 10% TO 11%
3,434
0.5
43,858
0.2
32
1.0
65,683
2.2
3,466
0.5
109,541
0.4
OVER 11% TO 12%
22,448
3.0
149,248
0.7
1
0.0
0
0.0
22,449
3.0
149,248
0.6
OVER 12% TO 13%
110
0.0
8,278
0.0
1
0.0
6,750
0.2
111
0.0
15,028
0.1
OVER 13% TO 14%
1,078
0.1
7,581
0.0
0
0.0
0
0.0
1,078
0.1
7,581
0.0
OVER 14% TO 15%
734
0.1
4,932
0.0
3
0.1
13
0.0
737
0.1
4,945
0.0
OVER 15% TO 16%
294
0.0
5,013
0.0
1
0.0
0
0.0
295
0.0
5,013
0.0
OVER 16% TO 17%
0
0.0
0
0.0
1
0.0
64
0.0
1
0.0
64
0.0
OVER 17% TO 18%
108,047
14.3
97,646
0.5
11
0.4
29
0.0
108,058
14.3
97,675
0.4
OVER 18% TO 20%
446
0.1
783
0.0
0
0.0
0
0.0
446
0.1
783
0.0
OVER 20%
0
0.0
0
0.0
0
0.0
0
0.0
0
0.0
0
0.0
753,629
100
21,401,312
100
3,109
100
2,986,689
100
756,738
100
24,388,001
100
Total
Weighted Average
Rate of Interest (%)
5.513
7.511
5.758
Source: Central Bank of Oman
STATISTICAL APPENDIX
125
Table 6
Structure of Private Sector Credit by Rate of Interest and Maturity
December 2023
(Rial Omani Thousands)
Other Loans and Advances
Overdraft
Rates of
Interest
(Per
Annum)
Credit Cards
Total
Less than 1 Year
Rial
Omani
Currency
Foreign
Total
Rial
Omani
NIL INTEREST
29,797
110
29,907
OVER 0%
TO 2%
7,139
0
OVER 2%
TO 4%
170,647
OVER 4%
TO 5%
Foreign
1 Year and above
Currency
Total
Rial
Omani
Foreign
Currency
Total
Rial
Omani
Currency
Foreign
Total
Rial
Omani
Currency
788
0
91
13,112
3,371
16,483
102,907
20,079
122,986
146,603
23,561
7,139
0
0
0
16,257
1,585
17,842
72,412
348
72,760
95,808
1,933
389
171,036
494
0
464
236,010
357
236,367
759,221
4,236
763,457
1,166,372
4,982
108,885
148
109,033
0
0
0
105,012
147,412
252,424
3,833,465
1
3,833,466
4,047,362
147,561
OVER 5%
TO 7%
380,873
19,831
400,704
1,929
0
1,311
1,740,191
64,216
1,804,407
9,280,586
217,173
9,497,760
11,403,579
301,220
OVER 7%
TO 8%
99,854
11,183
111,037
1,909
0
1,504
124,415
50,195
174,610
805,190
237,665
1,042,855
1,031,368
299,044
OVER 8%
TO 9%
34,257
0
34,257
6,051
0
385
37,367
12,568
49,935
114,779
740,390
855,168
192,454
752,958
OVER 9%
TO 10%
16,262
0
16,262
379
0
0
16,879
1,205
18,084
28,368
211,134
239,503
61,889
212,339
OVER 10%
TO 11%
29,853
2,956
32,808
0
0
0
7,817
0
7,817
6,123
62,505
68,628
43,792
65,461
OVER 11%
TO 12%
96,999
0
96,999
13,870
0
1,012
5,082
0
5,082
33,297
0
33,297
149,248
0
OVER 12%
TO 13%
1,431
0
1,431
1,332
0
1,445
3,455
0
3,455
2,059
0
2,059
8,278
0
OVER 13%
TO 14%
3,832
0
3,832
0
0
66
8
0
8
3,741
0
3,741
7,581
0
OVER 14%
TO 15%
4,777
13
4,790
0
0
0
137
0
137
17
0
17
4,932
13
OVER 15%
TO 16%
5,013
0
5,013
0
0
0
0
0
0
0
0
0
5,013
0
OVER 16%
TO 17%
0
64
64
0
0
0
0
0
0
0
0
0
0
64
OVER 17%
TO 18%
0
0
0
93,208
29
117,050
4,422
0
4,422
0
0
0
97,630
29
OVER 18%
TO 20%
0
0
0
783
0
732
0
0
0
0
0
0
783
0
OVER 20%
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Total
989,619
34,695
1,024,314
120,743
29
124,060
2,310,164
280,909
2,591,073
15,042,166
1,493,532
16,535,698
18,462,692
1,809,165
Weighted
Average
Rate of
Interest
(%)
6.199
6.830
6.220
15.774
17.500
15.774
5.762
5.504
5.734
5.524
8.071
5.754
5.657
7.649
Foreign
Source: Central Bank of Oman
126
STATISTICAL APPENDIX
Table 7
Licensed Banks In the Sultanate of Oman
(As at 31 December, 2023)
Name of the Banks
Date Of Establishment
Authorised Offices
Operating Offices
Local Banks
1. National Bank of Oman
1973
61
61
2. Oman Arab Bank
1973
50
50
3. HSBC Bank Oman
1975
0
0
4. Bank Muscat
1981
146
146
5. Bank Dhofar
1990
87
87
6. Bank Sohar
2007
77
77
7. Al Ahli Bank
1997
24
24
Foreign Banks
1. Standard Chartered Bank
1968
1
1
2. Habib Bank Ltd.
1972
0
0
3. Bank Melli Iran
1974
1
1
4. First Abu Dhabi Bank
1976
7
7
5. Bank Saderat Iran
1976
2
2
6. Bank of Baroda
1976
1
1
7. State Bank of India
2004
1
1
8. Bank of Beirut
2006
4
4
9.Qatar National Bank
2007
5
5
Specialised Banks
1. Oman Housing Bank
1977
9
9
2. Oman Development Bank
1977
19
19
Islamic Banks & Wndows
1. Bank Nizwa
2012
21
21
2. Al Izz Islamic Bank
2013
14
14
3. BM-Meethaq
2013
27
27
4. NBO - Muzn
2013
6
6
5. BD - Misara
2013
22
22
6. AHB - Al hilal
2013
22
22
7. BS - Sohar Islamic
2013
10
10
617
617
Total
Source: Central Bank of Oman
STATISTICAL APPENDIX
127
Table 8
Balance Sheet of Oman Housing Bank SAOC
(Rial Omani Thousands)
December 2022
December 2023
Cash and Bank balances
4,463
15,238
Mortgage loan accounts
25,987
0
Due from Government of Oman share capital
692,852
769,987
Other assets
2,624
2,928
Property and equipment
3,794
3,476
Total assets
729,720
791,629
Due to Banks
20,000
35,000
Customers' deposits
90,776
122,423
Other liabilities
18,110
22,268
Loan from Arab Fund for Economic
& Social Development
115,002
112,900
Loans from the Government
143,830
143,830
Loans from a Bank
21,250
18,750
Total Liabilities
408,968
455,171
Share capital
100,000
100,000
Legal reserve
30,400
32,571
Special reserve
74,344
78,251
Impairment reserve
9,294
9,202
Revaluation reserve
2,287
2,287
Retained earnings
104,427
114,147
Total equity
320,752
336,458
Total liabilities and equity
729,720
791,629
Mortgage Loan Commitments
43,960
40,671
Assets
Liabilities and Equity
A. Liabilities
B. Equity
Source: Oman Housing Bank SAOC
128
STATISTICAL APPENDIX
Table 9
Balance Sheet of Oman Development Bank SAOC
(Rial Omani Thousands)
December 2022
December 2023
Cash and balances with Central Bank of
Oman
1,391
1,673
Balances due from other banks
34,090
8,170
Loans and advances to costomers
155,168
203,018
Investments
14,560
10,905
Staff housing loans
945
857
Receivable from Government
3,108
2,907
Property and equipment
1,066
1,657
Prepayments and other receivables
865
524
211,193
229,711
Customer Deposits(Izdihar)
508
533
Payable to Government
567
1,121
Payable and accruals
7,369
8,033
Borrowings
33,840
48,292
Total liabilities
42,284
57,978
Share capital
100,000
100,000
Legal reserve
8,406
8,703
Investment revaluation reserve
282
133
Special reserve
5,541
5,541
0
0
Retained earnings
54,680
57,355
Total shareholdres' Equity
168,909
171,733
Total liabilities and shareholders' Equity
211,193
229,711
Net assets value per share
1.689
1.717
Commitments and contingencies
21,015
41,395
Assets
Total assets
Liabilities and Shareholders' Equity
Liabilities
Shareholders' Equity
Impairement IFRS 9 Reserve
Source: Oman Development Bank
STATISTICAL APPENDIX
129
Continuous Enhancement & Prosperity