Muscat: The state’s general budget has achieved a financial surplus of about RO784 million at the end of the first half of this year, compared to the financial deficit recorded during the same period in 2021.
The financial performance bulletin issued by the Ministry of Finance indicated an increase of 54.2 percent in total revenues collected until the end of the first half of this year to reach about RO 6.7 billion, compared to the same period in 2021.
The bulletin said that the increase in total collected revenues due to the rise in oil revenues is around RO3. 2 billion and gas revenues to about RO1. 7 billion.
Total public spending until the end of the first half of this year amounted to about RO5. 9 billion, an increase of 8.6 percent compared to the same period in 2021.
The Ministry of Finance said that the total dues paid to the private sector were more than RO500 million riyals by the end of the first half of this year.
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Total revenues collected by the end of the first half of 2022 amounted to RO 6.724 billion, comprising a rise of 54.2% compared to RO 4.361 billion registered over the same period in 2021.
The collected revenues accounted for 63.6% of total revenues estimated in the 2022 Budget which were RO 10.580 million.
This increase is attributed to net oil revenues going up by the end of the first half of 2022 by 40.1% to reach RO 3.187 billion compared to the same period in 2021. This is a result of a rise in the average oil price to 87 US Dollars per barrel compared to 53 US Dollars per barrel achieved over the same period in 2021 as well as a rise in average oil production to 1,037,000 barrels per day compared to 952,000 barrels per day registered over the same period in 2021.
Gas revenues by the end of the first half of 2022 hit RO 1.729 billion, comprising a surge of 137.8% compared to the same period in 2021. This is a result of higher gas prices and production.
At the end of the first half of 2022, current revenues amounted to RO 1.796 billion, up by 34.3% compared to the same period in 2021. Tax and fees revenues amounted to RO 1.125 billion, growing by 71.5% compared to the same period in 2021.
At the end of the first half of 2022, corporate income tax stood at RO 424 million, increasing by 23.3% compared to the same period in 2021. Moreover, excise tax and VAT revenues amounted to RO 48 million and RO 345 million respectively by the end of the first half of 2022.
Further, other revenues amounted to RO 671 million, including RO 392 million of dividends received from the Oman Investment Authority (OIA) at the end of the first half of 2022.
Public spending by the end of the first half of 2022 reached RO 5.941 billion, rising by 8.6% compared to the same period in 2021. Public spending amounted to 48.9% of the 2022 Budget estimates of RO 12.130 billion.
Development expenditure amounted to RO 413 million, up by 38.1% compared to RO 299 million reported over the same period in 2021.
Current expenditure at the end of the first half of 2022 amounted to RO 4.550 billion, increasing by 13.5% compared to the same period in 2021. This is driven by an increase of 154.6% in the gas purchase and transport expenditure to reach RO 639 million and a rise of 31.7% in public debt service to RO 521 million.
Total contributions and other expenses by the end of the first half of 2022 reached RO 863 million, going up by 88% compared to the same period in 2021. This is due to a rise in oil products subsidy to RO 314 million and an allocated RO 100 million for future debt obligations budget item which aims to repay part of future loans.
At the end of the first half of 2022, the budget posted a surplus of RO 784 million compared to a deficit of RO 1.108 billion over the same period in 2021.
During the first half of 2022, the Ministry of Finance paid the private sector’s dues received via the fiscal system which completed the documentary cycle and stood at RO 504 million.
The government benefited from the additional revenues during 2022 by accelerating economic recovery through increasing development expenditure to RO 1.100 billion compared to previous figures, up by RO 200 million to be allocated for priority projects and economic and social impact. As of the end of June 2022, development expenditure amounted to RO 413 million, increasing by 38.1% compared to RO 299 million reported over the same period in 2021.
RO 650 million was allocated for implementing additional development projects to be added to the projects list of the 10th Five-Year Development Plan (2021-2025). Such projects would be implemented across various health, education, housing, transport, tourism, and municipal sectors.
In light of the current global geopolitical situation, which led to a rise in oil prices and the price of basic food commodities, the Government revised the subsidies to mitigate the implications. By the end of the first half of 2022, government subsidy amounted to RO 314 million allocated for oil products subsidy (fuel prices were fixed in November 2021) and RO 11 million allocated for basic food subsidy.
Oman’s liability management exercise reduces public debt by buying back some of the sovereign bonds for less than their nominal value, repayment of high-cost loans, and issuance of government Sukuk in the Muscat Stock Exchange at preferable rates.
This contributed to declining total public debt which amounted to RO 18.6 billion by the end of July 2022. Debt servicing cost achieved a saving of RO 127 million, in addition to enhancing investors’ confidence and improving Oman’s credit ratings.
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