The gross foreign assets of the State General Reserve Fund (SGRF) – the biggest sovereign wealth fund of the Sultanate of Oman – increased 5.2 per cent to RO 6.659 billion as of September 30, 2019, up from RO 6.328 billion as of December 31, 2018, according to the Central Bank of Oman (CBO).

In contrast, the gross foreign assets of the CBO declined 0.8 per cent to RO 6.632 billion as of September-end 2019, down from RO 6.686 billion in December 2018, the apex bank said.

The figures were among the highlights of a report on Oman’s Foreign Trade and Balance of Payments for the first nine months of 2019 (January – September) published by the CBO earlier this week. It looked at, among other things, the implications of falling expatriate manpower and the resulting decline in outward remittances, on the current account balance.

“The trade balance improved during Jan-Sept 2019, as merchandise imports dropped considerably and compensated more than the decline in merchandise exports,” said the Central Bank in its report.

“As the expatriate workers declined by 2.6 per cent in September 2019 over their level a year ago, it is expected that workers’ remittance would have also declined accordingly during Jan-Sept 2019. With improved trade balance and an expected decline in worker’s remittances, the current account balance seems to have recorded improvement during Jan-Sept 2019.

The overall balance of payments, however, became negative as reflected by a decline in the country’s net foreign exchange reserves during this period. Notwithstanding improvement, the elevated current account deficit remains a challenge for public policy.

The fiscal deficit also causes the current account deficit (CAD) through a large dependence on imports for both consumption and investment. Hence, the fiscal consolidation being pursued would help in further reducing the CAD in the future,” the report stated, noting that the fiscal deficit declined to RO 1.5 billion during Jan-Sept 2019, down from RO 1.9 billion during Jan-Sept 2018.

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