Oman’s budget deficit climbs to RO 751 million in first quarter on lower oil revenues
Published: 11:05 PM,May 01,2021 | EDITED : 09:05 PM,May 01,2021
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State revenues plummeted 30.5 per cent to RO 1.818 billion by the end of the first quarter of 2021, weighed down primarily by a slump in oil revenues, Oman’s Ministry of Finance said in its latest monthly bulletin. Corresponding revenues for Q1 2020 totalled RO 2.615 billion in comparison.
Earnings were pulled down by a 34.2 per cent slump in net oil revenues, which fell to RO 918.6 million for Q1 2021, versus RO 1.397 billion for the corresponding quarter of 2020. The decline was attributable to “low oil prices and economic implications triggered by the Covid-19 pandemic”, the ministry noted.
Oil prices averaged $50 per barrel during this period (versus $65.49/b during Q1 2020) on an output averaging 950K barrels per day. Gas revenues, on the other hand, remained stable at RO 365.3 million this year, roughly on par with earnings of RO 365 million during Q1 2020.
Current revenues climbed six per cent to RO 514.2 million this year, up from RO 485 million last year. Total Capital Revenue and Repayments plunged 94.4 per cent to RO 20.6 million this quarter, compared to RO 368.4 million during Q1 2020 — a difference attributed to the privatisation of Oman Electricity Transmission Company (OETC) that generated a yield of RO 365.4 million, recorded in March 2020, it stated.
At the same time, public expenditure dipped 2.73 per cent to RO 2.570 billion this year, down from RO 2.642 billion for Q1 2020, the ministry said, ascribing the decrease to, among other factors, a reduction in spending across a number of government units. The budget deficit at the end of the first quarter soared to RO 751.4 million, up from RO 26.3 million for the corresponding quarter of 2020.
The newsletter also cited S&P Global’s latest ratings outlook for Oman, which affirmed its ‘B+/B’ credit ratings for the Sultanate, with a ‘stable’ outlook. “S&P expects economic and fiscal pressures on Oman to ease from the current year, citing that the fiscal reforms will help to reduce the deficit. It also stated the importance of continued fiscal consolidation in order to enhance fiscal position and further improve Oman’s credit rating,” the ministry said.
Also boding well for economic recovery efforts are ‘Social Protection Initiatives’ launched on the directives of His Majesty Sultan Haitham bin Tarik on April 8, 2021.
“These initiatives, which worth more than RO 100 million, aim to mitigate the implications arising from current global economic situation, and alleviate the immediate effects of measures taken to enhance the efficiency of public finance.
Moreover, His Majesty has directed to enhance and stabilise labour market, in order to ensure effective participation of the private sector in leading the economy in line with Oman Vision 2040. The endorsement of His Majesty for these initiatives comes as a continuation of stimulus measures to address social and economic aspects,” the ministry added.
Earnings were pulled down by a 34.2 per cent slump in net oil revenues, which fell to RO 918.6 million for Q1 2021, versus RO 1.397 billion for the corresponding quarter of 2020. The decline was attributable to “low oil prices and economic implications triggered by the Covid-19 pandemic”, the ministry noted.
Oil prices averaged $50 per barrel during this period (versus $65.49/b during Q1 2020) on an output averaging 950K barrels per day. Gas revenues, on the other hand, remained stable at RO 365.3 million this year, roughly on par with earnings of RO 365 million during Q1 2020.
Current revenues climbed six per cent to RO 514.2 million this year, up from RO 485 million last year. Total Capital Revenue and Repayments plunged 94.4 per cent to RO 20.6 million this quarter, compared to RO 368.4 million during Q1 2020 — a difference attributed to the privatisation of Oman Electricity Transmission Company (OETC) that generated a yield of RO 365.4 million, recorded in March 2020, it stated.
At the same time, public expenditure dipped 2.73 per cent to RO 2.570 billion this year, down from RO 2.642 billion for Q1 2020, the ministry said, ascribing the decrease to, among other factors, a reduction in spending across a number of government units. The budget deficit at the end of the first quarter soared to RO 751.4 million, up from RO 26.3 million for the corresponding quarter of 2020.
The newsletter also cited S&P Global’s latest ratings outlook for Oman, which affirmed its ‘B+/B’ credit ratings for the Sultanate, with a ‘stable’ outlook. “S&P expects economic and fiscal pressures on Oman to ease from the current year, citing that the fiscal reforms will help to reduce the deficit. It also stated the importance of continued fiscal consolidation in order to enhance fiscal position and further improve Oman’s credit rating,” the ministry said.
Also boding well for economic recovery efforts are ‘Social Protection Initiatives’ launched on the directives of His Majesty Sultan Haitham bin Tarik on April 8, 2021.
“These initiatives, which worth more than RO 100 million, aim to mitigate the implications arising from current global economic situation, and alleviate the immediate effects of measures taken to enhance the efficiency of public finance.
Moreover, His Majesty has directed to enhance and stabilise labour market, in order to ensure effective participation of the private sector in leading the economy in line with Oman Vision 2040. The endorsement of His Majesty for these initiatives comes as a continuation of stimulus measures to address social and economic aspects,” the ministry added.