Oman’s Ministry of Finance (MoF) has stated that the Sultanate is expected to record the lowest annual budget deficit since 2014 this year because of the government’s Medium-Term Fiscal Plan (MTFP).
HE Sultan bin Salim al Habsi, Oman’s Minister of Finance, has noted that early data indicates that the state budget for 2022 will have the lowest deficit since 2014, despite the fluctuation in oil prices during the past period.
The budget deficit for Oman in 2022 is expected to be $3.8 billion (RO1.5 billion), accounting for 15 percent of total revenues and 5 percent of Gross domestic product (GDP), which falls within the range of deficits estimated in the Medium-Term Fiscal Plan.
“This accomplishment is attributed to the government’s resolve to stick to the MTFP, both at the level of revenues and spending, with the overall aim of meeting the main objectives and increasing the confidence of lenders and credit rating agencies,” remarked HE Habsi.
According to the statement, “A major part of the deficit in 2022 will be financed from external and internal borrowing, while the rest of the deficit, around $1 billion (RO400 million), will be funded through withdrawal from the state’s reserves.”
HE Habsi further remarked that the budget for 2022 was prepared in accordance with the aims and pillars of the 10th Five Year Development Plan (2021-2025), the first leg of Oman Vision 2040.
“Estimated total revenues for 2022 budget stood at $27 billion (RO10.580 billion), based on the price of oil as $50 per barrel, which is 6 percent higher than the estimated revenues for 2021,” as per the reports.
The Minister of Finance affirmed that the most important goal in drafting public spending estimates was to maintain spending on essential services like education, health, housing, and social welfare. This is in addition to maintaining procedures and instruments aimed at improving the business climate and expanding partnership projects undertaken with the private sector.
HE Habsi pointed out that “in case oil prices go up beyond the price endorsed in the budget, priority will be given to using the surplus to cut down the deficit and repay the installments of loans.”
