Friday 19 / April / 2024
Muscat: Oman’s State Budget registered a surplus of OMR357 million at the end of the first quarter of 2022.
The surplus will be used to accelerate economic recovery, enhance development expenditure and reduce the risks of the country’s public debt portfolio.
As of end-first quarter 2022, public revenue amounted to OMR3.025 billion, up by 66.3 percent compared to the same quarter in 2021, according to the monthly bulletin of the Ministry of Finance.
This increase in public revenue is thanks to a healthy 70.2 percent increase in net oil revenue at the end of the first quarter of 2022.
Oil revenues during the period reached OMR1.56 billion, compared to the same timeframe in 2021. The increased oil revenues were driven by a hike in average oil prices, which rose to $78 a barrel, as well as increased oil production at the rate of 1.025 million barrels a day.
For the same period in 2021, the average oil price stood at $45 a barrel, while oil production was around 952,000 barrels a day.
Similarly, revenues from gas also rose in the first quarter of 2022, showing an increase of nearly 125 percent to reach OMR454 million, owing to expanded gas production.
Furthermore, current revenues during this period rose by 23.7 percent. This was funded largely by inflows from value added tax (OMR69 million), excise taxes (OMR24 million) and improved collection of government revenue.
Public spending
Public spending rose slightly in the first quarter of 2022, reaching OMR2.668 billion, 3.8 percent more than it did during the same period in 2021. However, the current expenditure by civil ministries and registered organisations were almost the same. Public debt servicing registered an increase at OMR291 million.
The development expenditure of civil ministries and allied organisations rose 130.8 percent during the first quarter of 2022, to reach OMR150 million, compared to the same time period in 2021. This amount represents 13.6 percent of the development budget of OMR1.1 billion allocated in 2022. Contributions and other expenses accounted for another OMR179 million, including OMR50 million towards public debt service.
Following the decision issued in November 2021 to stabilise vehicle fuel prices as per the rates in October 2021 as maximum, subsidies for oil products amounted to OMR67 million. The government shall cover the difference resulting from any excess in oil prices up to the end of 2022.
At the end of the first quarter of 2022, the budget continues to register a surplus, totalling OMR357 million as compared to a deficit of OMR751 million over the same period in 2021.
By the end of the first quarter of 2022, the Ministry of Finance paid the private sector an amount of OMR146.4 million. This reflects the payment vouchers received through the e-financial system, those that have completed the documentary cycle.
Projected GDP growth
According to the MENA Economic Update released by the World Bank, Oman’s economy is projected to recover as measures against the COVID-19 pandemic continue to be lifted, and also due to increasing oil prices and production.
The gross domestic production (GDP) is projected to grow to 5.6 percent, supported by the growth of more than eight percent and two percent in oil and non-oil sectors, respectively, in 2022. However, the GDP growth is projected to decrease to 2.7 percent on average in 2023 and 2024.
