$ 3.9 billion budget deficit in Oman due to the low oil prices

Oman recorded its highest deficit in the general budget amounted by 3.9 billion US dollars by the end of May last year after oil revenues fell by 36 percent due to the global low oil prices. The Statistical Bulletin of Public Finance in Oman issued by the National Center for Statistics and Information reported that the oman’s total revenues during the first five months of this year was 3 billion and 86 million riyals, compared to 6 billion and 44 million riyals during the same period last year, Adding that the total public expenditure declined by a meager 5 percent up to four billion and 809 million riyals, compared to 61 million riyals last year. In addition to 550 million riyals actual expenses. 

Specialists said that the decline in oil prices reflected negatively on total public revenues, where the net oil revenues dropped after allocations reserve funds increased by 46.3 percent since the beginning of the year and until the end of May reaching two billion and 326 million riyals; that’s why it was included in the statistics of public spending of Oman, but some of its provisions recorded expenditures increased by 6 percent compared to the first five months of 2014 to $ 3 billion and 247 million riyals. This is shows that the civil ministries, which include accounted salaries takes the largest cut of the expenses amounting to one billion and 628 million riyals with a slight decline of 3.2 percent compared to May 2014.

Also the defense and national security expenses declined by 6.6 percent to one billion and 265 million riyals that’s after agreed to Iran continue enrichment in limited quantities, and use of centrifuges for the purposes of scientific research, as the agreement stipulates, that the sanctions on Tehran will be implied within 65 days in case of any violations.

The expenditures represents 68 percent of public expenditures and it increases significantly with respect to investments approximately by 23 percent, the ministry of finance also added that the social sectors will remain a priority in the budget. And due to the deterioration in crude oil prices which Sultanate of Oman earn from it nearly 79 of its revenues, the government forced Muscat to take preventive measures to maintain financial and economic stability in the Sultanate, the ministry also stated that these measures will have no impact on the quality of life or the social services or work which are fixed pillars in the government policy which supports consumer goods and services with more than 8% of public expenditure and the government also will increase it in the new budget.