RIYADH: Oman’s general index of import prices saw an increase of 1.1 percent in the third quarter of 2024 compared to the same period in 2023, according to data from the National Center for Statistics and Information.

The largest price hike was observed in the miscellaneous manufactured goods category, which rose by 11 percent. This was followed by beverages and tobacco (up 6.7 percent), and food and live animals (up 5.7 percent).

Other notable increases included machinery and transport equipment (5.3 percent), chemicals and related materials (4.3 percent), raw materials (4.3 percent), manufactured goods primarily categorized by material (1.6 percent), and vegetable and animal oils, fats, and waxes (0.9 percent).

In contrast, the category of mineral fuels and related materials saw a significant decrease of 22.2 percent.

This increase in import prices aligns with Oman’s overall rise in imports, which grew by 10.8 percent, reaching 8 billion Omani rials ($20.8 billion) by June 2024, up from 7.2 billion rials in the same period of 2023.

Additionally, the general index of import prices declined by 4.8 percent when compared to the second quarter of 2024. This drop was largely due to decreases in the prices of beverages and tobacco (-22.4 percent), mineral fuels and related materials (-11.6 percent), and chemicals and related materials (-10.8 percent).

The miscellaneous manufactured goods category also saw a reduction of 10.2 percent, while machinery and transport equipment dropped by 3.9 percent. However, the raw materials category saw a 32 percent increase, vegetable and animal oils, fats, and waxes rose by 9.2 percent, and food and live animals increased by 3.5 percent.

Lending trend

Oman’s banking sector experienced a 4.2 percent year-on-year growth in the total balance of credit granted by the end of November 2024, reaching 32.2 billion rials.

According to the Central Bank of Oman, credit to the private sector grew by 5.1 percent, totaling 26.8 billion rials during the same period. This growth reflects the central role of the banking sector in providing credit within the Omani economy, especially given the limited access the private sector has to debt capital markets. In 2022, private sector credit represented 55.4 percent of the country’s gross domestic product, a trend consistent with data from the International Monetary Fund.

Further breakdowns of the credit data revealed that the largest share (45.3 percent) of the private sector credit went to individuals, followed closely by non-financial companies at 45.1 percent. The remaining 9.6 percent was divided between financial firms (6.1 percent) and other sectors (3.5 percent).

In terms of deposits, the total balance in Omani banks grew by 10.8 percent, reaching 31.5 billion rials by the end of November. Of this, private sector deposits increased by 9.2 percent, amounting to 20.6 billion rials.

The breakdown of private sector deposits revealed that the individual sector held the largest share at 49.7 percent, followed by the non-financial corporate sector at 30.6 percent, and the financial corporate sector at 17.1 percent. Other sectors accounted for 2.6 percent.

RIYADH: Saudi Arabia’s small and medium enterprises recorded their strongest employment growth in 10 months during December, fueled by long-term expansion plans and robust domestic demand, according to a new report. 

The Riyad Bank Saudi Arabia SME Purchasing Managers’ Index stood at 56.9 in December, slightly lower than November’s 57.1 but well above the neutral 50 mark, indicating sustained growth in the sector. 

Strengthening the SME segment is a cornerstone of the Kingdom’s economic diversification strategy under Vision 2030, aimed at reducing dependence on oil revenues. 

Finance Minister Mohammed Al-Jadaan highlighted the sector’s rapid growth in October, noting that the number of SMEs in Saudi Arabia had doubled over the past seven years, with 45 percent now led by women entrepreneurs. 

“The Riyad Bank Saudi Arabia SME PMI concluded the year on a high note, reflecting a robust performance of the SME sector. The fourth quarter of the year showcased a marked improvement over the third quarter, with the average PMI hitting 56.8, the highest quarterly reading since the end of 2023,” said Naif Al-Ghaith, chief economist at Riyad Bank.  

He added: “This upturn in the SME sector is a testament to the thriving economic environment, characterized by increasing output levels and a surge in incoming new work.”  

The report attributed December’s employment surge to sharp increases in output and incoming new work, supported by stronger business and consumer spending. 

The analysis said that SMEs widely reported strong demand conditions, fueled by increased business and consumer spending, alongside a supportive economic environment. 

S&P Global said job creation rose in December, with staffing levels and growth rates accelerating at their fastest pace since February. 

“This surge in employment is fueled by long-term business expansion plans and upcoming new projects, reflecting a positive outlook among SMEs,” said Al-Ghaith.  

Despite higher input costs, including salary increases and rising raw material prices, inflation pressures eased slightly in December compared to the previous month. 

Business confidence among SMEs reached its highest level since March, marking three consecutive months of improved expectations. 

He added: “This optimistic trajectory aligns with Saudi Arabia’s Vision 2030.”  “The strong performance of SMEs, as evidenced by the Riyad Bank Saudi Arabia SME PMI, underscores the ongoing efforts to bolster economic diversification and support the growth of this sector.”  

He said that SMEs’ resilience and expansion are pivotal for achieving Vision 2030’s goals of creating sustainable employment and promoting inclusive economic growth. 

The positive SME performance aligns with broader economic trends. A separate S&P Global report showed that Saudi Arabia’s overall PMI for December reached 58.4, signaling robust growth in the non-oil economy. 

“By fostering a vibrant SME sector, Saudi Arabia can enhance its economic resilience, create sustainable employment opportunities, and promote inclusive growth, all key components of a diversified and dynamic economy,” concluded Al-Ghaith.  

The employment growth reflects the Kingdom’s ongoing commitment to transforming its economy into a global hub for innovation, entrepreneurship, and investment.