(MENAFN- Muscat Daily) Oman has raised budget spending by 4.5 per cent to RO14.1bn for 2015 up by 4.5 per cent compared with 2014 spending estimates despite a sharp decline in oil prices.
Overall public revenues have been estimated at around RO11.6bn only one per cent lower compared to approved last year revenues the Ministry of Finance said in its budget statement released on Thursday.
The significant increase in public spending widened government's projected 2015 fiscal deficit to RO2.5bn equal to 21 per cent of public revenues and eight per cent of Oman's GDP. However the Ministry of Finance statement did not specify the assumed oil price at which Oman's 2015 budget is based. Brent crude oil prices fell nearly 50 per cent since June 2014.
Of the government's total revenues for 2015 oil revenues are estimated at RO9.16bn representing 79 per cent of total revenues while non-oil revenues are estimated at RO2.44bn.
In the budget current expenditure accounts for RO9.6bn or 68 per cent of total spending. Investment expenditure will be RO3.2bn or 23 per cent of total spending to cover development projects capital expenses for oil and gas production and projects being carried out by government entities.
The estimated cost of subsidy programmes amount to RO1.1bn nearly eight per cent of overall public spending.
Social requirements
The budget include financial allocations of RO9bn - same as last year - to meet the social requirements in the fields of education health housing training support and other social services. The allocation for education sector amounts to RO3bn representing 21.3 per cent of total spending while internal and external training programs are given RO95mn.
Allocations for health sector amount to RO1.6bn that includes opening and operating 11 new hospitals and health centres in different parts of the sultanate. The social insurance welfare programme has been allocated RO129mn. The budget allocations for Oman's housing sector is at RO2.3bn of which RO55mn will be for housing assistance programs supervised by Ministry of Housing. This includes construction of new houses in different wilayats plus an amount of RO15mn to provide easy housing loans. In addition RO15.4mn for housing loans program of the Oman Housing Bank.
On the other hand RO1.8bn is estimated for subsidies and exemptions including subsidies for interests on housing and development loans beside subsidy for electricity water fuel and some basic foodstuffs.
Financing deficit
According to the statement among economic objectives of 2015 budget is to finance the budget deficit by issuing longterm Islamic bonds (sukuk) and instruments so as to activate the domestic capital market and raise the efficiency of exploitation of domestic savings. However it did not specify the plans for sukuk or bond issuance in 2015.
Privatisation
Regarding government's privatisation programme the Ministry of Finance's statement pointed out that a plan to privatise a number of state-owned companies is currently being prepared for implementation over the coming three years (2015-2017). The execution of this plan will start immediately upon approval.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.