Oman budget shortfall swells to RO1.6bn in Q1

6/27/2016 1:57:16 AM

(MENAFN- Muscat Daily) Muscat-

Oman''s budget deficit more than tripled in the first three months of 2016 from a year earlier as the oil-price slump sapped government revenue.

Total expenditure, meanwhile, declined by less than two per cent.

The deficit sharply widened to RO1.64bn from RO544.6mn, data released by the National Centre for Statistics and Information (NCSI) showed.

While government revenues fell by nearly RO1bn, or 40.6 per cent, to RO1.45bn in the first quarter, total expenses decreased by just 1.9 per cent to RO2.39bn.

The sultanate''s budget expects the deficit to balloon to RO3.3bn this year, compared with actual arrears of RO4.5bn in 2015.

Net oil revenues plummeted 48.7 per cent to RO858.2mn in the first quarter of 2016 from RO1.67bn in the same period a year ago, while gas revenue fell 28 per cent to RO320mn. Revenue from custom duties jumped to RO46mn but corporate income tax dropped to RO21.6mn from RO137.1mn.

Oman recently raised US$2.5bn in an international bond sale arranged by five international banks to help meet its budget deficit. This was the sultanate''s first international bond issue in two decades. The government sold US$1bn in bonds to mature in five years at an interest rate of 3.625 per cent and a ten-year issue worth US$1.5bn at 4.75 per cent.

The International Monetary Fund (IMF) recently warned that Gulf oil exporters must cut spending and narrow their budget shortfalls to keep their currencies pegged to the dollar. ''When a country faces prolonged fiscal and external deficits, policy adjustment must come from fiscal consolidation measures,'' the IMF said in a report earlier this month.

The Fund lowered its forecast for Oman''s economic growth this year as it expects oil prices to remain low for longer and global growth to continue at a sluggish pace. IMF expects the sultanate''s economy to grow by 1.8 per cent in 2016.

The government''s current expenditure on oil production dropped 56 per cent in the first quarter of 2015 to RO85.4mn from RO194mn a year earlier, while investment expenditure on oil production fell by 9.8 per cent to RO155.1mn.

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.