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Not one rial withdrawn from Oman's reserve
July 23, 2019 | 8:51 PM
by Times News Service
 
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Muscat: Oman did not withdraw a single rial from its reserves during the first five months of 2019, according to government data.

The recovery in oil prices and a surge in non-oil revenue helped boost the economy, according to data from the National Centre for Statistics and Information (NCSI)

A recovery in oil prices has enabled the country to efficiently manage its economy as the 2019 projected budget deficit is OMR2.8bn, lower than the 3bn deficit estimated in 2018.

For the first time since the oil prices dropped significantly, the total revenues of the Sultanate during the first five months of this year amounted to OMR4.716 billion, while the total public expenditure amounted to OMR4.626 billion, the figures showed. This meant that the budget surplus amounted to OMR90 million.



A senior government official told Times of Oman: “Based on the achieved revenues during the first five months of 2019 and equivalent expenditure, the country managed to run a financial flow efficiently. The government withdrew OMR300 million last year from reserves, whereas, in 2019, it hasn’t yet withdrawn a single rial.

“The fiscal performance shows that total expenditure declined by 4.3 per cent during the first five months of 2019, and the revenue significantly increased.”



The recovery in oil prices and a surge in non-oil revenue helped boost the economy


The statistics also showed a significant decline in external borrowing from OMR1.95 billion in the first five months of last year, to less than OMR 60 million in the first five months of this year. Local loans up to the end of May 2018 were OMR150 million, and during the same period in 2019, fell to OMR100 million. The Ministry of Finance has also responded forcefully to a media report regarding financial transparency.

“The ministry refutes the report as it does not reflect the reality of the situation in the Sultanate.

“The ministry confirms that all public financial data is available regularly through a monthly statistical bulletin issued by the National Centre for Statistics and Information which is officially responsible for publishing all statistical data and indicators in accordance with the regulations in force in the Sultanate.

“As for what the agency reported regarding the impact of the absence of the public financial statements it had of investors, who are considering investing in government bonds, and their ability to analyse the financial position of the Sultanate, the Ministry confirms that the procedures by which bonds are offered are preceded by the issuance of a comprehensive guide containing financial and economic data for investors which include financial statements.”

“The Ministry of Finance invites all media establishments to refer to the statistical publications issued by the National Centre for Statistics and Information through the centre’s portal at www.ncsi.gov.om,” the Ministry added.

Dr Talal Al Aulaqi, a member of the Oman Economic Association, spoke to Times of Oman about the boost to the Oman economy: “The oil prices have surged, which led to an increase in revenues. This is one of the main reasons behind keeping reserves untouched.”

He added: “Oman resorts to external borrowing mainly to pay the salaries of the public sector employees. I believe that the oil prices will increase due to the political turmoil in the region mainly in the Strait of Hormuz, Libya and Iraq.”

Ramanuj Venkatesh, a financial analyst in the country, said this bodes well for Oman’s economy because it means there will be more money to invest in the Sultanate in future.

“If Oman did not draw any money from its reserve, this means it is good for the economy because you now have adequate funds that can be used for other purposes, such as infrastructure development,” he said. “State-of-the-art infrastructure would give Oman the advantage compared to the other Gulf nations, so there will be more investment into the country”.

“Another area of investment might be tourism, which is still in its very early stages, and funding is taking place for many projects in Oman at the moment. Education would be another area which would benefit from investment” added Venkatesh. “Oman’s population has plenty of young talent who only need help to hone their skills, so you could have plenty of trade and training institutions that would be of great help to the nation.”

He went on to say: “These youth are the future of the country, so that is the biggest advantage of Oman. It does not have an ageing population in terms of demographics. Oman also has plenty of gas reserves in the country, so that will provide them with a very good income, given that the government has properly invested and will continue to do so. I think these surplus funds will help further diversify the economy, which will also help the country proceed with its Omanisation policies.”

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