Oman’s State Budget Projects More Than RO 11 billion Revenues for 2024

Total Revenues of State’s Budget Estimated at More Than RO 11 Billion for 2024

Muscat: The Ministry of Finance announced that the total estimated revenues of the state’s general budget for the fiscal year 2024, which were calculated on the basis of the average oil price of (USD 60) per barrel, stood at about (RO 11.010 billion), constituting an increase of (9.5 percent) over the estimated revenues for the year 2023.

This was stated during the media briefing held by the Ministry of Finance today. The total public spending for the state’s general budget for 2024 was estimated at approximately (RO 11.650 billion), constituting an increase of (2.6 percent) over the estimated spending for 2023. The stated total public expenditure includes the debt servicing cost, which stands at about (RO 1.050 billion).

The budget deficit was estimated at approximately (RO 640 million), representing (6 percent) of total revenues and (1.5) percent of the gross domestic product (GDP).

Sultan Salim Al Habsi, Minister of Finance, explained that the state’s general budget for the fiscal year 2024 takes into account the balance between a set of determinants and priorities while continuing to pay the public debt and reducing it as much as possible.

Al Habsi added that the 2024 state budget aims to improve the business environment and expand the participation of the private sector in the economic development, in addition to supporting the social aspect by enabling the Social Protection Fund to play its desired role as an umbrella for initiatives aimed at upgrading the level of insurance coverage and social protection for citizens, as well as maintaining the level of spending in basic services, such as education, health and housing.

The minister said in his speech that oil revenues in the 2024 budget constitute (54 percent) of total revenues, while the gas sector’s contribution amounts to (14 percent) and non-oil revenues represent (32 percent) of total public revenues.

He added that estimating these public revenues comes within the framework of the precautionary approach to reduce the burden of any financial challenges that may arise during the fiscal year 2024 and ensure that financing needs are met in the event of a decline in oil prices.

The minister pointed out that the total financing needs for the fiscal year 2024, based on the oil price approved in the budget, will stand at (RO 2.2 billion), including the deficit and loan installments expected to be repaid during this year.

He noted that the ratio of public debt to the GDP stood at about (35 percent), lower by (50 percent) by the end of 2023 than the ratio it reached at its peak in 2020, when it stood at about (70 percent) of the GDP.

The Minister of Finance explained that the financial surpluses achieved as a result of the rise in oil prices were utilized to implement a solid plan according to which a large percentage of the debts were paid, in addition to implementing a number of postponed development projects. This was reflected in the projects of the 10th Five-Year Plan, whose commitments increased from (RO 5 billion) as it was at the beginning to more than (RO 8 billion) by the end of 2023. Priority was given to projects with a social dimension, such as education, health and social housing projects.

He pointed out that the total sums approved for these sectors in the 2024 budget stood at (RO 4.635 billion), representing (40 percent) of the total spending.

The minister stated that the government measures taken during the last period were met by credit rating agencies with a series of positive credit rating reports. This contributed to mitigating the increase in interest rates that were supposed to be paid on loans. The total amounts paid for debt service from 2020 until the end of 2023 stood at (RO 4.062 billion).

Al Habsi said, “In order to achieve the objectives of the 10th Five-Year Plan to realize “Oman Vision 2040”, and within the framework of the policy of supporting economic diversification sectors and encouraging the establishment of projects that contribute to this diversification, and linking this approach to governorate development projects, financial allocations were provided. These allocations consisted of raising the capital of the Development Bank to (RO 500 million), raising the maximum lending limit from RO 1 million) to (RO 5 million), and providing a room to exceed this limit for development projects that add value to the local economy in the governorates of the Sultanate of Oman, in addition to launching a specialized investment fund (Oman Future Fund) with a capital of (RO 2 billion)”.

The minister affirmed that a programme called “Iskan” or “Housing” will be launched with a total value of up to (RO 1.9 billion), with the prime aim of accelerating the pace of granting loans through Oman Housing Bank.

For his part, Abdullah Salim Al Harthy, Undersecretary of the Ministry of Finance, gave a visual presentation highlighting prominent global financial, economic and monetary indicators. He shed light on the decline in global economic growth to reach (2.9 percent) in 2024 and a decline in global inflation rates to (5.8 percent).

He added that the average global oil prices, according to the expectations of international agencies during 2024, are expected to reach about USD 81 per barrel.

The undersecretary expected that the GDP at constant prices will grow by (2.3 percent) in 2023 and by (2.4 percent) in 2024.

He touched on the preliminary results of the financial performance for the year 2023, which indicate achieving a financial surplus of about (RO 931 million), against an estimated deficit in the state’s general budget of about (RO 1.3 billion).

He explained that the state’s public revenues during 2023 rose to (RO 12.213 billion), constituting an increase of about (RO 2.163 billion) compared to what was approved in the budget for the same year. Public spending recorded (RO 11.282 billion).

He added that net oil revenues in 2023 grew by (29 percent) to record about (RO 6.883 billion), while net gas revenues increased by (43 percent) to reach about (RO 2 billion).

Al Harthy stressed that the preliminary results of the financial performance for 2023 indicate that the government managed to reduce the public debt from (RO 17.6 billion) to (RO 15.2 billion) by paying about (RO 2.4 billion), which led to saving (RO 140 million) from the debt servicing cost.

He explained that the net oil revenues in the 2024 budget are estimated at approximately (RO 5.915 billion). The collection of net gas revenues is estimated at about (RO 1.575 billion), and the collection of non-oil revenues estimated at approximately (RO 3.520 billion.

The Undersecretary at the Ministry of Finance pointed out that the 2024 budget allocated about (RO 1.140 billion) to the development budget and projects with a developmental impact. He added that the current expenditures in the 2024 budget are estimated at about (RO 8.573 billion), constituting a percentage of (73 percent) of total public spending.

Meanwhile, the Minister of Finance affirmed that the government will continue to subsidize fuel prices. He added that (RO 60 million) have been allocated for the promotion of employees of the years (2013 and 2014), whose number reaches more than (52,000) employees. Starting from tomorrow, employees (seniority of 2013) will be promoted, while employees (seniority of 2014) will be promoted starting next July 2024.

The minister concluded, “It is expected that during 2024, about (RO 1.6 billion) will be paid from the public debt of the Sultanate of Oman. Employment in the government is based on the natural growth of projects and replacement, and that (RO 36 million) have been allocated in the 2024 budget for training programmes coupled with employment”.   – ONA