Omani Nominal GDP Achieves 13 Percent Growth in Opening Three Quarters of 2012
Driven by rising oil prices and higher domestic demand, Oman’s nominal gross domestic product moved up 13.1 percent in the opening nine months of last year. The sultanate’s nominal GDP hit RO 22 billion in that period, up from RO 19.47 billion in the same period the year previous, according to data from NCSI.
Oil and gas remained the largest contributors to Oman’s economy and rose 11.2 percent over the period, reaching RO 11.49 billion. Activity within the services sector also grew at a rate of 16.3 percent to hit RO 8.14 billion.
Within the services sector, domestic demand drove retail and wholesale up by 16.5 percent over the nine months. According to the Central Bank of Oman, economic growth continued as a result of rising oil prices, robust domestic demand, high rates of public expenditure and CBO monetary policies.
Oman’s industrial sector grew by 6.6 percent over the 2011 figures, reaching RO 3.22 billion. Manufacturing rose to RO 2 billion, up by 7.5 percent, and construction grew by 4.2 percent to RO 946 million. Ministry of Finance statements indicate that higher domestic demand has resulted from rising oil prices and the salary increases and hiring that occurred in 2011.
Consumption has also increased as residents enjoy enhanced income, which allows them greater access to credit. Benefits of job creation, higher wages and increased government spending have spread into the services sector, while infrastructure spending has boosted performance in services and construction.
According to the Ministry of Finance source, growth should stretch over a four to five year period to come. Growth in foreign direct investments also indicates that global confidence in the nation is up. Emphasis on developing local SMEs remains a positive step that could amount to even greater economic growth, according to the Finance Ministry source.
Trade Between Saudi Arabia and Japan Reaches New Height
A recent meeting of the SJBC (or Saudi-Japanese Business Council) involved the possibility of industrial city developments, manpower and petrochemical projects.
Saudi president of the SJBC, Abdul Rahman Al-Jeraisy, noted that the meeting was held in Asharqia because of the region’s position in the petrochemical and oil industries.
Al-Jeraisy stated that the healthy relations between Japan and the kingdom have stretched over 50 years now. He also called on the private sectors of both nations to utilize investment opportunities available within the relationship.
Trade between the two nations increased to SR 212bn in 2012, up from SR 165.6bn in the previous year. Saudi imports from Japanese sources hit SR 31.1bn and exports hit SR 180.8bn.
Dr. Abdul Aziz Turkistani, the kingdom’s ambassador to Toyko, noted over 200 business professionals attended the recent meeting. One hundred Japanese execs were on hand to represent major firms.
Japanese companies involved in the energy sector attended, as well as those from water management, banking, automobiles, petrochemicals, infrastructure and engineering. Dr. Turkistani made note of the efforts to build cooperation within the trading relationship. Four strategies are set for implementation over a four-year span within the petrochemical, infrastructure and oil sectors and involving the transferring of technology from Japan and the training of manpower from the Kingdom.
Turkistani noted that over 450 students from Saudi Arabia are attending institutes and universities in Japan. The embassy is also working to attract Japanese investments to various sectors in the Saudi economy, including rail, solar and renewable energy, desalination and infrastructure. Japanese visas are issued in one day through the embassy.
Qatar Experienced Sustainable Growth as Evidenced in the Banking System
QCB governor HE Sheikh Abdullah bin Saud al-Thani noted that positive performance in Qatar’s banking sector indicates sustainable economic growth in 2012.
Total assets for Qatar’s commercial banks reached QR 817 billion in 2012, an increase of 18 percent over the 2011 figures, according to Sheikh Abdullah’s comments at the recent Meed Qatar Projects Conference.
Deposits within local institutions equalled QR 458 billion, an increase of 26 percent over the previous year. Credit extended by local banking firms grew by 27 percent to reach QR 477 billion.
The governor noted that although the banking sector expanded, non-performing loans remained contained.
Non-performing loans remained at only 1.7 percent of total loans, a ratio indicative of the quality of assets within Qatar’s commercial banking establishments. Preliminary figures put GDP growth at 11 percent for 2012, reaching a level of QR 700 billion according to Sheikh Abdullah.
The goal of a risk-free financial system remains within the nation’s National Vision 2030. Several measures are in place to move Qatar toward this goal, said Sheikh Abdullah. Regulatory frameworks need realignment to allow banking, insurance and investment firms to be properly monitored. The nation’s capital market also needs to be revitalized, according to the governor.
QCB set up the Financial Stability Department and Credit Bureau in an effort to reach the goals laid out in the plan.
Sheikh Abdullah forecasted growth of about 5.5 percent for Qatar’s real GDP in the next year.
The IMF recently released a report on Qatar stating an expected growth of 5.2 percent in 2013, noting that a medium term healthy economic outlook is supported by strong growth within non-hydrocarbons.
Estimates from the IMF state that nominal GDP of Qatar will surpass $191 billion, up from $184.7 billion last year. The IMF also noted that Qatar’s banking system continues at capitalized and profitable levels.
The commercial banks’ capital adequacy ratio increased to 21.1 percent in June of last year, up from 16.1 percent back in 2010. Non-performing loans dropped in that time period, from 2 percent down to 1.7 percent. The figure for return on assets reached 2.5 percent in June 2012.
The IMF also noted that Qatar should work at reducing liquidity levels and risks within currency mismatching, as well as limiting the exposure found in the real estate sector.Paul Holdsworth, Staff Writer, Gulf Jobs Market News