Oman private sector lending climbs 4.6% to $55bn by July
Oman private sector lending climbs 4.6% to $55bn by July /node/2617062/business-economy
Oman private sector lending climbs 4.6% to $55bn by July
Private sector lending rose 4.6 percent to 21.3 billion rials ($55.4 billion), according to the Central Bank of Oman. Shutterstock
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MOHAMMED AL-KINANI
Oman private sector lending climbs 4.6% to $55bn by July
Updated 20 sec ago
MOHAMMED AL-KINANI
JEDDAH: Oman’s conventional commercial banks expanded credit by 8 percent year on year by the end of July 2025, official data showed.
Private sector lending rose 4.6 percent to 21.3 billion rials ($55.4 billion), according to the Central Bank of Oman. Investments in securities fell 3.4 percent to 5.8 billion rials, with holdings of government development bonds climbing 6.3 percent to 2 billion rials, while foreign securities declined 15.7 percent to 2.1 billion rials.
The central bank’s 2025 Financial Stability Report pointed to strong capital buffers and high-quality assets, noting that Oman’s banking sector remains profitable and well-positioned to absorb external shocks.
“Private sector deposits increased 4.1 percent to 17 billion rials by the end of July, accounting for 66.3 percent of total deposits with conventional commercial banks,” ONA reported, citing the report’s findings.
On the liabilities side, the recent official data noted that the total deposits with conventional commercial banks grew 3.6 percent to 25.7 billion rials by the end of July. It added that government deposits rose 7.1 percent to 5.8 billion rials, while deposits from public sector institutions fell 11 percent to 1.7 billion rials.
Real estate trade value hits 2.12bn rials
According to the National Centre for Statistics and Information, Oman’s total real estate transaction value reached 2.124 billion rials by the end of August, marking a 9.9 percent increase from 1.933 billion rials in the same period last year.
Fees for legal transactions rose 81.7 percent to 79 million rials. Similarly, sale contract values grew 16.1 percent to 831 million rials, despite a slight 1 percent drop in the number of contracts to 43,971.
Meanwhile, mortgage contract values rose 6.4 percent to 1.285 billion rials, while exchange contract values declined 17.7 percent to 7.6 million rials. Additionally, property ownership transfers rose 2.6 percent to 153,764, though transfers to GCC nationals fell 12.8 percent to 859 ownerships.
S&P affirms Oman’s BBB- rating
The global financial rating agency S&P has affirmed Oman’s long-term foreign and local currency sovereign credit rating at “BBB-” with a stable outlook, citing the government’s commitment to financial reforms and its ability to maintain economic stability despite oil price fluctuations.
“The report noted that the government’s reforms — including restructuring state-owned enterprises, diversifying income sources, and establishing the Oman Future Fund — have strengthened economic resilience and attracted foreign investment,” ONA reported.
The agency expects Oman’s real GDP growth to rise from 1.7 percent in 2024 to over 2 percent annually during 2025–2028, supported by non-oil sector expansion.
It forecasts Brent crude prices to climb from $60 per barrel in late 2025 to $65 in 2026–2028, with public debt falling from 36 percent of GDP in 2024 to 33 percent by 2028. Inflation is expected to average 1.5 percent, government net assets to remain at 8 percent, and non-oil growth to hold at 2.9 percent annually.
S&P also noted a small fiscal deficit of 0.5 percent of GDP in 2025, moving to a balanced budget by 2026, with an average current account deficit of 1.9 percent of GDP.
Ƶ and South Korea deepen cooperation in innovation and SMEs
Updated 28 September 2025
MIGUEL HADCHITY
RIYADH: Saudi-Korean bilateral cooperation in innovation and enterprises is set to flourish after the two nations discussed expansion opportunities in high-potential sectors.
A meeting between Ƶ’s Investment Minister, Khalid Al-Falih, and South Korea’s Minister for SMEs and Startups, Han Seong-suk, in Seoul focused on strategically building entrepreneurial environments and orchestrating efforts to drive SME success.
Al-Falih also participated in a roundtable with pioneering firms under the Saudi-Korean SME and Entrepreneurship Programme, where companies presented innovations and explored prospects for expanding into the Saudi market across key emerging sectors.
“The meeting saw discussions on ecosystems for entrepreneurship and coordinating efforts to empower SMEs in high-potential sectors,” Al-Falih said in a post on X.
This focus on SME and startup collaboration is part of a broader, rapidly expanding partnership between the two nations. The ministers’ meeting coincided with the fifth ministerial meeting of the Saudi-Korean Vision 2030 Committee, which Al-Falih led.
The committee reviewed progress on joint initiatives, which are now set to be elevated under the oversight of the high-level Strategic Partnership Council, chaired by the Crown Prince.
“This Strategic Partnership Council affords new vistas in artificial intelligence, smart cities, culture, and innovation, whilst advancing diversification,” Al-Falih added on his X account, inviting Korean enterprises to invest in Vision 2030 opportunities, including Expo 2030 and the 2034 World Cup.
The growing partnership, which has seen investment licenses jump from 65 in 2016 to 213 today, is built on a foundation of strategic collaborations in diverse fields.
Recent agreements have paved the way for this enhanced cooperation. Earlier this year, the Saudi Space Agency and the Korean Aerospace Administration signed an MoU to collaborate on deep space technologies, manned flight programs, and satellite launches.
Furthermore, in August, the Saudi General Court of Audit and South Korea’s Board of Audit and Inspection inked a deal to strengthen cooperation in accounting and auditing practices.
These collaborations in space, audit, and now SMEs and startups underscore a comprehensive strategic alignment.
As Al-Falih noted, the partnership with the Republic of Korea has “advanced apace,” encompassing major strategic collaborations with giants like Samsung in advanced technologies and Hyundai in automobile manufacturing.
The bilateral cooperation between the Kingdom and South Korea also spans the defense sector. In February, the two countries signed a government quality assurance agreement to strengthen defense cooperation and boost their military capabilities and long-term industrial development.
The deal, signed during the International Defense Exhibition and Conference in Abu Dhabi, underscored growing ties between the two nations in defense and technology.
Saudi Crown Prince Mohammed bin Salman’s 2019 visit to South Korea led to the signing of an MoU aimed at strengthening defense and industrial partnerships, focusing on military acquisitions, research, and technology.
Since then, defense ties between Ƶ and South Korea have grown through several agreements.
RIYADH: Ƶ’s foreign direct investment net inflows climbed 14.5 percent year on year to SR22.8 billion ($6.1 billion) in the second quarter, signaling a steady appetite for the Kingdom’s reform-driven economy.
The figure, released by the General Authority for Statistics, compared with SR19.9 billion a year earlier.
On a quarterly basis, net inflows dipped 3.5 percent from the SR23.7 billion recorded in the first three months of 2025, underscoring lingering global headwinds that continue to weigh on cross-border capital flows.
The increase in net inflows reflects a broader effort by Ƶ to attract long-term foreign capital as part of its Vision 2030 strategy, which aims to diversify the economy beyond oil revenues.
The Kingdom has been implementing regulatory reforms, opening up sectors such as tourism, renewable energy, and technology to international investors, and launching initiatives through the Ministry of Investment to position Ƶ as a regional hub for capital flows.
In its release, GASTAT stated: “The volume of inflows amounted to about SR24.9 billion during the second quarter of 2025. It achieved a decrease of 11.5 percent compared to the second quarter of 2024, which was approximately SR28.2 billion.”
It added: “While it recorded a decrease of 3.5 percent compared to the first quarter of 2025, which recorded SR26 billion.”
Meanwhile, FDI outflows dropped sharply to SR2.1 billion, down 74.5 percent from SR8.2 billion a year earlier and 10.5 percent lower than SR2.3 billion in the previous quarter.
While Ƶ continues to draw large-scale strategic investments, maintaining momentum will depend on investor confidence in regulatory stability and the pace of economic diversification projects.
In the Gulf region, the UAE remains a leading competitor for FDI. In 2024, UAE inflows reached $45.6 billion, marking a 48 percent year-on-year increase and earning the country a top-10 global ranking in FDI recipients.
Dubai, in particular, saw a 33 percent increase in FDI capital in 2024, attracting a record 1,117 greenfield projects.
GASTAT defines foreign direct investment as cross-border transactions in which a foreign investor holds at least 10 percent of the voting power in a Saudi company.
The net inflow figure represents the balance between total inflows and outflows, reflecting the extent of retained foreign investment in the Kingdom.
Ƶ has recently stepped up efforts to attract foreign capital through regulatory and market reforms.
In June, the government issued 83 new industrial licenses and launched 58 factories worth SR 2.85 billion.
Recent media reports also highlight that authorities are considering easing the 49-percent cap on foreign ownership in listed companies to boost equity market inflows, although no official announcements have been made.
In parallel, global firms such as Macquarie Asset Management have signed preliminary agreements to establish a presence in the Kingdom, targeting infrastructure and energy sectors.
GCC tourism surges to $247bn as intra-regional travel accelerates
Updated 28 September 2025
Mohammed Al-Kinani
JEDDAH: Tourism across the Gulf Cooperation Council contributed $247.1 billion to the region’s economy in 2024, marking a nearly 32 percent increase compared with 2019, the latest official data showed.
According to preliminary data from the GCC Statistical Center, intra-GCC travel experienced a sharp rebound, rising 52 percent over the same period, with 19.3 million visitors traveling between member states.
Intra-regional tourism now accounts for 26.7 percent of total GCC tourism, highlighting growing cultural integration and regional mobility.
The findings appear in a report titled “GCC Tourism: Intra-Gulf Integration,” released to coincide with World Tourism Day on Sept. 27. The report underscores tourism’s expanding role as a driver of economic growth, employment, and cultural exchange, while supporting environmental sustainability initiatives across the Gulf.
Ƶ continued to set the pace for regional tourism expansion. In 2024, the country welcomed a record 30 million international visitors, up 8 percent from 2023, generating SR284 billion ($75.7 billion) in tourism spending, an 11 percent increase year on year. Total domestic and international tourists reached approximately 116 million, rising 6 percent over the previous year.
Ƶ’s rapid growth extends into 2025. According to the UN World Tourism Organization’s World Tourism Barometer, the Kingdom posted the highest global increase in international tourist revenue during the first quarter of 2025, with arrivals up 102 percent compared with the same period in 2019.
Madinah, the Kingdom’s spiritual and cultural heart, has been named among the world’s top 100 tourist destinations by Euromonitor International, ranking first in Ƶ, fifth in the Gulf, and sixth in the Arab world — a recognition of continued investment in visitor experiences and tourism development.
Key attractions include the Museum of the Architecture of the Prophet’s Mosque, the Safiyya Museum, and a growing portfolio of entertainment and cultural projects.
GCC-Stat projects that tourism’s contribution to the GCC’s GDP could reach $371.2 billion, or 13.3 percent of GDP, by 2034. Employment in the sector is also expected to expand, generating an estimated 1.3 million new jobs, with women representing an increasing share of the workforce.
The report highlights the sector’s broader economic and social impact, including fostering regional integration, supporting indirect industries such as transportation and infrastructure, and advancing environmental stewardship through protected areas covering nearly 19 percent of the region’s landmass.
Saudi AUM hits record $295bn, on track for $500bn by 2030: S&P Global
Updated 28 September 2025
Nirmal Narayanan
RIYADH: Ƶ’s asset management industry grew 12 percent annually from 2015 to 2024, with total assets reaching nearly $295 billion by the first quarter of 2025, according to S&P Global.
In its latest analysis, the credit rating agency noted that the Kingdom’s asset management sector is set to maintain its upward trajectory, supported by robust growth in local capital markets.
This momentum reflects a regional trend, with total assets under management across the Gulf Cooperation Council rising 9 percent to $2.2 trillion by the end of 2024, according to Boston Consulting Group.
BCG identified Ƶ and the UAE as the main drivers of retail mutual fund growth, while Kuwait and Abu Dhabi’s sovereign wealth funds accounted for the largest share of regional assets.
Commenting on the latest report, S&P Global Ratings Credit Analyst Timucin Engin said: “We expect AUM (in Ƶ) will continue to increase at a healthy pace. This is due to ongoing regulatory efforts and continued growth in debt and equity markets, as well as the increasing availability of exchange-traded funds, real estate investment trusts, and other retail and institutional products.”
Key drivers of growth
According to S&P Global, Saudi regulators are working to boost the sector’s appeal among both local and global investors. Initiatives include expanding the institutional investor base, introducing new retail and institutional products, and strengthening domestic asset classes.
Authorities also aim to position the Kingdom as a hub for regional and global capital flows, attracting international fund managers and market institutions.
“The development of domestic capital markets forms an important part of Ƶ’s economic diversification. Their expansion could also contribute to the financing of Vision 2030,” said Benjamin Young, credit analyst at S&P Global.
The agency further noted that the rise of Saudi ETFs listed abroad should improve liquidity in secondary markets, as these instruments attract both institutional and retail investors internationally.
In July, Ƶ’s Capital Markets Authority published amendments to investment fund regulations to improve transparency, disclosure, risk management, and investor protection.
Among other changes, public funds are now able to invest in privately placed debt instruments, which could benefit the emerging private credit sector in the country.
In April, another report by Fitch Ratings said that Ƶ’s asset management industry grew by 20 percent year on year in 2024, pushing the sector’s total assets to SR1 trillion ($266 billion) for the first time.
Fitch added that the industry is expected to continue attracting steady inflows through 2025 and 2026, with assets under management projected to exceed SR1.3 trillion.
According to Fitch, key drivers of growth include a growing investor base, favorable demographics, ongoing economic reforms, strong capital markets, and digital transformation initiatives.
In its latest report, S&P Global said that Ƶ’s AUM will continue to increase at a healthy pace and has the potential to exceed $500 billion by year-end 2030, subject to market conditions.
“Our expectation is based on the assumption that AUM will continue to increase by 10 percent annually until 2030, compared with 12 percent over the past decade. The increasing issuance of debt and money market instruments will likely lead to a gradual increase in the proportion of fixed income instruments as an asset class,” said S&P Global.
It added: “While this is a high-level estimate, we note that sector growth also depends on market conditions and that actual growth could deviate from our expectations.”
Private vs public funds
S&P Global’s breakdown shows private funds account for roughly 50 percent ($148 billion) of total AUM, followed by discretionary mandates at $96 billion and public funds at $51.5 billion.
Real estate, a very popular asset class in the GCC, contributes almost 50 percent, or $72.2 billion, to Saudi private funds’ AUM, followed by equities.
As of March 31, 2025, equities accounted for about $47.4 billion, or 49 percent, of Saudi discretionary portfolio mandates’ total AUM.
In the discretionary mandates portfolio, public funds’ asset allocation is more balanced, with about 31 percent in money market instruments, 25 percent in equities, and 13 percent in debt instruments as of the same date.
The report added that public fund subscribers rose to nearly 1.6 million in March 2025, from about 265,000 in June 2013, with about one-third investing in real estate investment trusts.
Broader Impacts
A well-developed asset management industry could provide Ƶ’s young and growing population with access to more diversified savings and investment products, encouraging higher long-term saving rates.
“The development of capital markets is intended to form an important part of the country’s economic diversification, which, in turn, could reduce oil-related economic and fiscal volatility. Their expansion could also contribute to the financing of Vision 2030,” said S&P Global.
It added: “From a sovereign credit perspective, deep, diversified, and transparent domestic capital markets can provide multiple advantages. Ultimately, their sustainable development can provide an important source of financing for economic agents and facilitate effective monetary policy.”
S&P Global further said that the development of Ƶ’s capital markets through regulatory initiatives and improving market liquidity contributed to the Kingdom’s upgrade to ‘A+’ from ‘A’ in March 2025.
At the time, the credit rating agency noted that the ongoing social and economic transformation in the Kingdom can help boost activity in construction, logistics, manufacturing, and mining sectors, prompting GDP growth over 2025–2028.
Global context
Despite its rapid growth, Ƶ’s asset management sector is still in the early stages compared to global peers.
The report highlighted that Luxembourg, Singapore, and Ireland are established global fund domicile centers, while asset management expansion in other countries often stems from domestic factors.
It also noted that Ireland has emerged as Europe’s go-to ETF hub, currently accounting for about 70 percent of the EU’s AUM in ETFs.
“Similarly, Singapore has become a regional and global investment hub. Among other factors, it also offers strategic access to the Asian headquarters of many global financial institutions,” said Ivan Tan, credit analyst at S&P Global.
The scent of Vision 2030: Saudi oud’s journey to world markets
Ƶ’s oud makers and exporters are expanding to keep up with rising global demand
Updated 27 September 2025
Reem Walid
RIYADH: While perfumes are gaining fresh attention across the Kingdom, oud remains the soul of the Gulf’s scent identity, deeply rooted in Saudi heritage and now poised for global growth.
Ƶ’s oud and fragrance retail market is projected to see a 14 percent compound annual growth rate from 2024 to 2029, reaching approximately SR18.5 billion ($4.93 billion) by the end of the period, according to Euromonitor.
This growth will be driven largely by rising demand for premium oud-based perfumes, fueled by increasing consumer spending.
Euromonitor also showed that premium men’s fragrances, many of which feature oud, are expected to be the fastest-growing category, aligning with a regional shift toward greater male investment in personal care. Arabian Oud Co. led the market in 2024, holding a 9 percent retail value share.
Before exploring oud’s transformation, it’s worth stepping back to understand the shifting dynamics of fragrance demand in the Gulf Cooperation Council, and what gives the region its uniquely bold scent identity.
Changes in demand for luxury fragrances in the GCC in recent years
The Gulf Cooperation Council region has long stood apart as deeply sophisticated when it comes to fragrance.
“But what we are seeing today is a meaningful evolution, from passive consumption to informed appreciation,” Marco Parsiegla, CEO of Omani luxury fragrance brand Amouage told Arab News, adding: “Clients are no longer simply buying perfumes; they are seeking stories, origins, and a sense of intentionality in what they wear. It is a fact that fragrance here is not an accessory; it’s an extension of personal identity and cultural heritage.”
Founded in 1983, Amouage is a luxury fragrance house known for its rich, oud-infused scents that blend Middle Eastern tradition with modern perfumery — and it is widely available in Ƶ through upscale retailers in cities like Riyadh and Jeddah.
To keep up with demand, Saudi oud exporters are also innovating in sustain-able sourcing.
Olivier de Cointet, senior adviser, consumer and retail at Arthur D Little
Parsiegla went on to underline that the market’s growing maturity allows brands like Amouage to prioritize depth over trends. He explained that demand has shifted toward richer concentrations and limited, long-lasting creations.
“Our Exceptional Extraits, Attars, and Essences collection continue to perform exceptionally well in the GCC precisely because they reflect these values: rarity, intricacy, and permanence,” the CEO said.
“For us at Amouage, this region is not a target market, it’s home. It’s where our roots lie and where our vision is constantly challenged and refined. As we continue to expand globally, the GCC remains integral to how we define the meaning of high perfumery in a world that increasingly values quality, craftsmanship, and richness of expression,” Parsiegla added.
GCC’s distinctive scent profile
Parsiegla explained that for centuries, the region has maintained a strong connection to scent — where elements like oud, musk, and frankincense were more than commodities; they were cherished. This enduring bond with natural ingredients has cultivated a bold and distinctive scent identity.
“Unlike markets where perfumery is more seasonal or trend-driven, the GCC has developed its own codes such as layering, incense (Bakhoor), and oud which have been passed on through generations. These are not habits; they’re traditions. And in that sense, the scent profile here reflects a lived aesthetic that values intensity, permanence, and resonance,” he said.
“At Amouage, we don’t approach this profile as outsiders. We were born into it. And what makes the GCC unique is not just the preference for bold or opulent compositions, but the discernment behind those preferences. There’s an expectation here that perfume should move you, intellectually, emotionally, even spiritually. That’s a high standard to meet, but also an inspiring one,” the CEO added.
Saudi artisans and the increasing global demand for oud
Ƶ’s oud makers and exporters are expanding to keep up with rising global demand — estimated at $6 billion a year, according to newsletter Aramco World — while preserving their traditional craftsmanship.
According to Olivier de Cointet, senior adviser, consumer and retail at Arthur D Little, traditional extraction methods continue to be central to oud production, with a strong commitment to preserving the rich, complex scent — described as earthy, animalic, and leathery — that has made it a prized luxury ingredient among perfumers globally.
The govern-ment’s export promotion arm is likewise opening doors abroad through training, trade missions, and support programs.
Sundeep Khanna, partner, consumer and retail at Arthur D Little
“To keep up with demand, Saudi oud exporters are also innovating in sustainable sourcing. They have forged supply chains with Southeast Asian partners, and some major perfume houses invest directly in agarwood plantations abroad to secure high-quality supply. At home, new initiatives encourage cultivating Aquilaria trees on Saudi soil. For example, the project launched this year in Madinah to grow agarwood trees locally,” de Cointe said.
Vision 2030’s role transforming oud into a premium export
As part of Vision 2030, Ƶ has identified fragrances — particularly oud — as a key non-oil export to support economic diversification and generate employment opportunities.
From ADL’s side, Sundeep Khanna, partner, consumer and retail, explained that government efforts are enabling local fragrance brands to grow internationally and highlight Saudi artistry. In 2024, for example, Al-Majed for Oud became one of the first Saudi perfume companies to announce a public listing.
Ƶ is turning to cultivated trees and biotech solutions to safeguard supply. (AFP)
“The government’s export promotion arm is likewise opening doors abroad through training, trade missions, and support programs — part of a broader push that lifted Saudi non-oil exports to a record SR515 billion in 2024,” Khanna said.
He added that a critical driver is Vision 2030 tying cultural heritage to economic value, with programs such as “Year of Handicrafts 2025.”
Growth, sustainability of Ƶ’s oud industry
Sustainability is now central to oud’s future, and ADL’s de Cointet highlighted that with wild agarwood at risk, Ƶ is turning to cultivated trees and biotech solutions to safeguard supply.
Government projects such as the Madinah farms aim to domesticate oud production, while global producers explore lab-grown methods to produce resin without harming natural forests.
“Looking ahead, collaborations with luxury brands are expected to further boost the Saudi oud industry’s visibility and sophistication. Saudi perfume houses increasingly work with renowned perfumers and luxury houses on exclusive editions and scent development,” he said.
Partnerships to boost oud value
Speaking on behalf of ADL, Khanna shed light on how Ƶ is tapping into partnerships with leading global fragrance houses, like Penhaligon’s 2024 AlUla launch, to elevate oud’s value and reposition it as a contemporary economic asset.
“Ƶ is also forging direct collaborations and knowledge exchanges with luxury brands to enrich its local industry. The National Museum in Riyadh recently hosted ‘Perfumes of the East’ – an international exhibition, with France as a key partner, that immersed visitors in Arab perfume heritage and included workshops by perfumers like Christopher Sheldrake,” he said.
The ADL partner added that such events connect Saudi artisans with global experts, spurring innovation in blending traditional oud oil with modern techniques.
