Friday, March 29, 2024 | Ramadan 18, 1445 H
broken clouds
weather
OMAN
23°C / 23°C
EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Keeping deficit under check 2019 budget’s priority

Haider-al-Lawati
Haider-al-Lawati
minus
plus


Haider al lawati -
haiderdawood@hotmail.com -




There are three main items in any state financial budget: income, expenditure and deficit. According to the 2019 budget for the Sultanate issued under Royal Decree No 1/2019, the state’s estimated income and public expenditures are RO 10.1 and 12.9 billion respectively, whereas deficit for this year has been forecast at RO 2.8 billion.
The Sultanate has always applied financial prudency in budget management to tackle the challenges posed by declining oil prices.
The priority is to keep the budget deficit under 10 per cent of the GDP. 2019 budget depends on the price of oil being $58 a barrel, with
an average production of 970,000 barrels per day.
The government might need to reconsider taking further action to control deficit and maintain public debt at reasonable levels against the GDP.
The recent fluctuations in oil prices triggered several strict measures in government institutions to maintain monthly expenses and cut spending as much as possible.
The 2019 budget aims to allocate sufficient funds for the strategy to implement infrastructure projects, continue payments and achieve economic diversification by promoting private sector involvement.
Focus will also be on improving and promoting the investment climate, enhancing government-private partnership and supporting SMEs by allocating a share of government subsidy to these businesses.
In addition, attention will be given to promoting e-transformation, facilitating procedures, opening up an investment portal and utilizing the Sultanate’s strategic location to transform the country into a global trading hub in the region.
In this year’s budget, oil and gas account for 74 per cent of the state’s total revenues, but Oman is committed to reducing oil production in line with Opec’s decision to cut production.
Non-hydrocarbons are expected to account for 26 per cent of the total government revenue, or RO 2.65 billion, which is a decrease of 2 per cent over 2018.
The government continues to focus on the welfare of its citizens by allocating a big chunk of spending on education, health, housing, social care and basic social services.
On the other hand, deficit in the 2019 budget has been projected at 2.8 billion, to be funded through loans (86 per cent) and withdrawal from reserves (14 per cent).
Moreover, investment spending in the 2019 budget is estimated at RO 3.7 billion, of which RO 1.2 billion has been allocated for infrastructure and projects such as construction of hospitals, water and electricity networks, schools, housing, highways and roads and improvement of airports. The balance RO 2.5 billion will be utilized by state-owned enterprises for implementing industrial and service projects.
As part of the government’s efforts to achieve economic diversification, the budget allocates subsidy for five economic sectors targeted by the National Programme for Enhancing Economic Diversification Tanfeedh: manufacturing, logistics, tourism, fisheries and mining.
The budget includes revenues of RO 120 million through the sale of government-owned investments, plans to move forward in privatizing some entities, providing investors with alternatives, providing 5,000 jobs in the public sector — which will be filled on the basis of need — and continuing government efforts to take necessary measures to enhance the capabilities of job-seekers and training 6,170 individuals through the National Training Fund.
Like previous budgets, this one aims at ensuring the stability of citizens’ living standards, continuing to stimulate economic and social growth, ensuring financial sustainability of the state, applying a policy of rationalized spending in light of declining oil prices and seeking to avoid any socio-economic consequences that can result from implementing these policies.
It is everyone’s wish that the budget will be able to meet aspirations and hopes of citizens, institutions and socio-economic sectors in the Sultanate.



SHARE ARTICLE
arrow up
home icon