MUSCAT: Oman’s economy on the back of the rising oil prices will support stronger deposit and asset growth this year for the sultanate’s lenders, who also stand to benefit from a rise in interest rates, BMI Research said.
Higher prices of hydrocarbons, sale of which accounts for the bulk of revenues for the government, will help add liquidity into the system. Together with expected monetary tightening, deposits are expected to grow by 6 per cent in 2018, up from 1.9 per cent in 2017, BMI, a unit of Fitch Ratings, said in its latest report on Oman’s banking system.
“This will help Omani banks deleverage, underpinning their resilience to macroeconomic shocks, such as a renewed oil price slump,” according to the report.
Economic growth in Oman is expected to accelerate this year and next, as the biggest Middle Eastern oil producer outside Opec boosts oil and gas exports. Real gross domestic product – GDP adjusted for inflation – is projected to expand by 3.2 per cent in 2018 and 3.6 per cent in 2019, from an estimated 0.6 per cent last year.