Oman foresees a budget deficit of 640 million rials ($1.66 billion) in 2024, equivalent to approximately 1.5 per cent of its GDP on Monday.
This fiscal shift marks a departure from the surplus recorded in 2023, attributing the turnaround to diminished oil production and pricing pressures impacting the nation’s finances.
The 2024 budget aligns with an average oil price projection of $60 per barrel, deemed conservative by prevalent estimates. Sultan Salim Al Habsi, Oman’s finance minister, emphasised that the budgetary estimations were devised to ensure financial sustainability amid potential oil price downturns.
Significant variance
In 2023, Oman initially projected a deficit but ultimately reported a surplus of 931 million rials ($2.42 billion), signalling a significant variance. The deputy finance minister cited the state news agency, highlighting the revised fiscal landscape.
Anticipated oil revenues for 2024 stand at 5.9 billion rials, marking a decrease from the 6.9 billion rials estimated for 2023. Despite efforts to diversify revenue sources away from hydrocarbons, Oman, akin to its Gulf counterparts, maintains a reliance on oil-generated income.
The 2024 fiscal plan outlines total revenues of about 11.01 billion rials, reflecting a 9.5 per cent increase from 2023 estimates, with non-oil revenues anticipated at 520 million rials. Estimated expenditures are projected to rise by 2.6 per cent to approximately 11.65 billion rials.
Initiating a medium-term fiscal programme in 2020, Oman aimed to curtail public debt, broaden revenue streams, and stimulate economic growth, bolstered by significant oil revenues in 2022. This strategic move has notably ameliorated the nation’s fiscal health, reducing public debt and enabling annual savings on future debt service.
The deputy finance minister underscored the national benefits of reducing total public debt, citing savings of 350 million rials annually in debt service and a reduction of approximately 5.5 billion Omani rials in total public debt by the end of 2023, as reported by the state news agency.
Oman anticipates debt repayments of 1.6 billion in 2024, further outlining its commitment to fiscal prudence amidst evolving economic landscapes.
