| Review of Banking and Monetary Developments – June 2025 | | | 8/13/2025 8:00:00 PM | Review of Banking and Monetary Developments – June 2025 | The nominal GDP, as per the preliminary data released by National Centre for Statistics and Information (NCSI), showed an increase of 4.7 percent at end of first quarter of 2025 over the same period of 2024. | <p style="text-align:justify;"><span class="ms-rteThemeFontFace-1 ms-rteFontSize-3">The nominal GDP, as per the preliminary data released by National Centre for Statistics and Information (NCSI), showed an increase of 4.7 percent at end of first quarter of 2025 over the same period of 2024. The growth in GDP was mainly driven by non-hydrocarbon sector. The non-hydrocarbon sector registered 6.8 percent growth , while the hydrocarbon sector registered 4.1 percent growth. As for real GDP, it demonstrates an increase of 2.5 percent at end of first quarter of 2025. This expansion was driven by 4.4 percent of non-hydrocarbon sector. The Omani oil average price at end of June 2025 at $74 per barrel was lower by 10 percent than that in June 2024. The average daily oil production at 989.2 thousand barrels as of June 2025 declined by 0.6 percent. The Sultanate's average Consumer Price Index (CPI) showed a Y-o-Y inflation of 0.8 percent as of June 2025.</span></p><p style="text-align:justify;"><span class="ms-rteThemeFontFace-1 ms-rteFontSize-3">Other depository corporations (ODCs) consist of conventional and Islamic banks in Oman. Total outstanding credit extended by ODCs grew by 8.4 percent to OMR 34.1 billion at the end-June 2025, with credit to the private sector demonstrating an increase of 6.6 percent (Y-o-Y) to reach OMR 28.0 billion. </span></p><p style="text-align:justify;"><span class="ms-rteThemeFontFace-1 ms-rteFontSize-3">Non-financial corporations received the highest share of the total private sector credit at approximately 45.9 percent at end-June 2025, followed by Household sector at 44.2 percent. The share of financial corporations was 6.2 percent while other sectors received the remaining 3.7 percent of total private sector credit as at end-May 2025. </span></p><p style="text-align:justify;"><span class="ms-rteThemeFontFace-1 ms-rteFontSize-3">Total deposits held with ODCs registered a Y-o-Y significant growth of 7.6 percent to reach OMR 33.0 billion at the end of June 2025. Total private sector deposits increased by 6.0 percent to OMR 21.9 billion. In terms of sector-wise composition of private sector deposits, the biggest contribution is from household deposits at 49.4 percent, followed by non-financial corporations at 31.0 percent, financial corporations at 17.4 percent and other sectors at 2.2 percent. </span></p><p style="text-align:justify;"><span class="ms-rteThemeFontFace-1 ms-rteFontSize-3">The combined balance sheet of conventional banks showed a Y-o-Y growth of 7.2 percent in total outstanding credit as of end-June 2025. Credit to the private sector increased by 4.8 percent to reach OMR 21.5 billion while their overall investments in securities increased by 1.3 percent to OMR 5.7 billion at end-June 2025. Investment in Government Development Bonds increased by 5.1 percent to OMR 2.0 billion, while foreign securities decreased by 6.0 percent to OMR 2.1 billion, at the end-June 2025. On the liabilities side, aggregate deposits held with the conventional banks inceased by 4.7 percent Y-o-Y to OMR 25.8 billion at end-June 2025. Government deposits with conventional banks increased by 9.9 percent at OMR 5.9 billion, and deposits of public enterprises decreased by 7.3 percent to OMR 1.7 billion. On the other hand, private sector deposits, which accounted for 66.4 percent of total deposits with conventional banks, increased by 4.0 percent as of Junel 2025 to reach OMR 17.1 billion. </span></p><p style="text-align:justify;"><span class="ms-rteThemeFontFace-1 ms-rteFontSize-3">The total assets of Islamic Banks and Windows increased by 17.4 percent on a Y-o-Y basis to OMR 9.2 billion and constituted about 19.9 percent of the banking system's assets at end-June 2025. Islamic banking entities provided financing of OMR 7.2 billion at the end of June 2025, recording a growth of 13.1 percent over that a year ago. Total deposits held with Islamic banks and windows increased by 19.6 percent to OMR 7.2 billion. </span></p><p style="text-align:justify;"><span class="ms-rteThemeFontFace-1 ms-rteFontSize-3">Among the indicators of monetary aggregates, broad money supply M2 at end-June 2025 increased by 5.6 percent to reach RO 25.4 billion. This is attributed to the increased in narrow money (M1) by 7.7 percent, along with 4.8 percent increase in quasi-money (Rial Omani saving and time deposits, certificates of deposit issued by banks, margin deposits and foreign currency denominated deposits). Looking at components of narrow money (M1) during the same period, currency with the public fell by 6.3 percent, while demand deposit increased by 10.8 percent.</span></p><p style="text-align:justify;"><span class="ms-rteThemeFontFace-1 ms-rteFontSize-3">The weighted average interest rate on OMR deposits with conventional banks witnessed a decrease from 2.651 percent at end-June 2024 to 2.560 percent at end-June 2025, and the weighted average lending rate decreased from 5.581 percent to 5.487 percent over the same period. Meanwhile, the overnight Rial Omani domestic inter-bank lending rate declined to 4.189 percent in June 2025 from 5.402 percent a year ago. This is an outcome of the decrease in the average Repo rate for liquidity injection by the CBO to 5.000 percent from 6.000 percent a year ago, in line with US Federal Reserve.<br></span></p> | 0x010100C568DB52D9D0A14D9B2FDCC96666E9F2007948130EC3DB064584E219954237AF3900075E4FF44B3F64489802BE694C5C6FB70300A9BCF8A0432A87429120A5B0A0EDBFF9 | | |