PHOTO:AFP
The Gulf state of Oman adopted on Monday its 2018 budget projecting a deficit of $7.8 billion due to low oil prices, but said the shortfall is declining.
Like other energy-rich Gulf states, Oman was hit hard by the slump in oil prices since mid-2014 and joined an agreement by oil producers to cut production in a bid to shore up prices.
Revenues in 2018 are estimated at $24.7 billion, up just three percent on last year, with spending projected at $32.5 billion, seven percent higher, according to a statement by the finance ministry.
Despite measures to reduce dependence on oil, income from crude is estimated to account for 70 percent of total revenues, the ministry said.
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In 2017, the ministry said the country posted a higher-than-expected deficit at $9.1 billion due to cuts in oil production in line with an agreement by OPEC and non-OPEC members.
The ministry said the budget shortfalls have been on the decline due to raising non-oil revenues and higher oil income.
To finance the budget deficit, Oman last year raised $11.2 billion in debt in the form of bonds, Islamic sukuk and loans. It plans to raise $6.5 billion this year, the ministry said.
About one-third of the budget spending this year has been earmarked for social services, education and health, the statement said.
Like other Gulf states, Oman has introduced a series of austerity measures and subsidy cuts to boost non-oil revenues.
But it has delayed the implementation of a five-percent value-added tax which Gulf peers Saudi Arabia and United Arab Emirates introduced on Monday.
Oman is a member of the six-nation Gulf Cooperation Council along with Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, but is not a member of the oil-producing OPEC cartel.
Source: G Business
