Oman on Sunday released the 2017 General Budget, which focuses on austerity measures and spending cuts owing to the plunge in oil prices. Government spending this year is projected to total 11.7 billion rials (Dh111.3 billion) and revenues 8.7 billion rials, which would result in a deficit of 3 billion rials.

Oman posted a budget deficit of 5.3 billion rials in 2016, as revenues declined by more than 30 per cent. The actual deficit has turned out to be much bigger than expected this year; it was 4.8 billion rials in the first 10 months of 2016, according to official data.

The country expects 4.5 billion rials from crude oil, 1.6 billion rials from natural gas and the remaining from other sources, according to the figures released in the official gazette on Sunday.

The ministries’ spending is estimated to be 4.3 billion rials in 2017, with a decline of 100 million rials, compared to 2016.

Spending on defence and security is estimated at 3.3 billion rials, with a drop of 100 million rilas.

The estimated deficit will be met by the international borrowing (2.1 billion rials), domestic borrowing (400 million rials) and drawings from State General Reserve Fund (500 millions).

Oman’s 2017 budget will not include any cuts in wages and salaries as well as the basic services provided to citizens.

Oman has been cutting state subsidies and introducing other austerity measures to curb the 2016 budget deficit.

The Ministry of Finance issued 19 circulars in 2016 aimed at controlling and managing spending.

In November, Oman introduced a 50 per cent increase in expatriates work permits in the private sector, which is expected to fill the state’s coffers with millions of rials amid the slump in oil prices.

 

— With inputs from Reuters

source : gulfnews