(MENAFN- Muscat Daily) Muscat- Oman's budget deficit narrowed in the first four months of 2017 mainly due to higher revenue as crude prices remained significantly up during January – April period against the same period of last year.
The budget shortfall decreased by 21.1 per cent during the first four months of 2017 compared with the same period of previous year, according to statistics released by the National Centre for Statistics and Information (NCSI).
The deficit for the four months to April was RO1.73bn. That compared with RO2.2bn deficit in the same period a year ago.
Oman government's total revenue in the first four months this year rose 19.1 per cent to RO2.55bn. Helped by higher oil prices compared to last year, net oil revenue rose 33.7 per cent to RO1.4bn from RO1.05bn a year ago. Gas revenue was up 8.8 per cent to RO461.6mn from RO424.4mn.
'Higher oil price [compared to last year] is a major contributor to better budget performance this year. The deficit has also narrowed due to other factors such as tightening in expenditures and increase in corporate income tax and other non-oil revenues,' Fabio Scacciavillani, chief economist of Oman Investment Fund, said.
Oman's 2017 budget was based on an oil price assumption of US$45 per barrel. The average price at which Oman sold its crude stood at US$51.6 a barrel during the first five months of 2017, which is 51 per cent higher from average oil price of US$34.2 a barrel in the same period of 2016, the NCSI statistics showed.
'Average price for oil has been above US$45 so far this year. This gives an optimism for a better fiscal performance for the rest of the year,' Scacciavillani added.
Oman's revenue from corporate income tax rose 29.8 per cent to RO273.6mn in January- April period of 2017 compared with RO210.8mn in the same period a year ago.
The government had introduced broad tax changes to the income tax law earlier this year and corporate income tax rate was raised from 12 per cent to 15 per cent.
The sultanate's total public expenditure decreased by 1.6 per cent to RO3.48bn in the first four months of 2017. The decline in total expenditure was mainly due to a 15.3 per cent drop in investment expenditure which stood at RO838.6mn in the first four months of 2017, while current expenditure rose 6.4 per cent to RO2.52bn.
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