Muscat Daily - 8/25/2019 10:38:44 PM - GMT (+4 )
The sultanate’s budget deficit declined by 53 per cent to RO660.6mn in the first half of 2019 from more than RO1.4bn deficit recorded in the same period of last year, the figures released by the National Centre for Statistics and Information (NCSI) showed on Sunday.
Oman’s annual budget deficit has been consistantly declining since 2016 as a result of measures taken by the government during this period to mitigate the impact of sharp drop in oil prices.
Boosted by higher income from oil, gas and corporate tax, the government’s total revenues grew 11.4 per cent to RO5.514bn during January–June period of this year compared to RO4.948bn in the corresponding period of 2018.
Net oil revenues rose 5 per cent to RO3.074bn in the first six months of 2019 compared to RO2.929bn a year ago. Gas revenues increased 9.3 per cent to RO939.6mn in the six months period this year from RO859.5mn in the same period of last year. Revenue from corporate income tax jumped more than 45 per cent to RO523.8mn.
On spending side, Oman’s total public expenditure decreased 2.8 per cent in the first half of 2019 to RO6.174bn from RO6.353bn in the corresponding period a year ago. The decrease in total spending was mainly due to a significant reduction in investment expenditure, which dropped 13.5 per cent to RO1.098bn from RO1.270bn in the first half of 2018. Current expenditure remained almost flat at RO4.306bn in the first half of 2019.
Expenditure under participation and support category, which also includes government subsidies, declined 18.1 per cent to RO292.8mn this year compared to RO357.3mn in the same period of last year.
Oman’s 2019 state budget, which assumed an average oil price of US$58 per barrel, projects a fiscal deficit at RO2.8bn for the full year.
‘The rise in oil prices provided required support to government revenues, while fiscal measures that were undertaken last year also continued to support the growth of non-oil revenue of the government. The government has made considerable progress in reducing the deficit over the last few years,’ the Central Bank of Oman (CBO) said in its annual report released on Wednesday.
The CBO, however, warned that in spite of improvements, Oman’s general budget is still facing challenges posed by oil price fluctuations as oil revenues remain the dominant source of government revenues.