Oman Economic, Banking, and Financial News

The Oman outlook for 2010 looks to be positive across the board with the GPD anticipated growing 4-5% by the end of the year. In fact, the Oman’s are among the most successful countries in the GCC region.

Various factors have been credited to the recent success and future outlook for the Sultante of Oman. Among there many tactful business moves, the Oman financial system is stable and traditional in there banking ethics. The platform is largely based on small investment portfolios with modest utilization of volatile wholesale and foreign funding. There platform is key because when the global economy began to take losses, there banking system was not affected nearly as much as other countries.

Among other factors, the rising of hydrocarbon outputs has been an important factor in supporting the financial situation. Other countries in the GCC region have seen declines in production throughout this time.

Moreover, the outlook is positive and the demand for oil combined with the positive fiscal policy feeds the momentum. In recent reports, there has been constant growth in the first 5 months of 2010 per the State News Agency.

The latest stats justify the positive outlooks for Oman. Total assets of commercial banks have increased by 9.8% from May 2009 to May 2010. In connection with total assets, cash on hand and deposits of commercial banks have also increased by roughly RO 223 million in a one year span. Also, the investments of commercial banks also increased by RO 178 million from May 09’ to May 10’.

Of many positive results this year, foreign securities did decrease by 29.5 % to RO. 165.4 million from RO. 234.5 million during the same period.

Most importantly, only $640 million of the Central Bank of Oman’s emergency budget was ever used. This marginal amount which was spent supports the numbers and theory that the CBO has a very stable internal financial system set up. Although, the numbers were not significantly higher this year compared to 2009, they are very impressive considering what other countries are going through.

Another key note is that the CBA is getting a lot of pressure because of the rising price of production of oil. Back in 2005, the prices were roughly at $5 per barrel but are currently well beyond $10 and expected to rise. The numbers are on a rising slope so it is ideal that the chairman of the CBA is already designing a way to prevent any intense pressure from rising production cost.

In conclusion, the outlook looks positive among the GCC region and the rest of the world.