MUSCAT: His Majesty Sultan Haitham bin Tarik on Monday issued Royal Decree No 1/2024 on the ratification of the State’s General Budget for the Fiscal Year 2024, after the same was presented before the Council of Oman.
Article (1) ratifies the State’s General Budget for Fiscal Year 2024 according to the tables attached to this Decree. Article (2) instructs all units of the State’s Administrative Apparatus and other public legal entities to implement the provisions of this Decree, each within the scope of its prerogatives.
Article (3) says that this Decree shall be published in the Official Gazette and enforced from January 1, 2024.
TOTAL REVENUES
The Ministry of Finance announced that the total estimated revenues of the state’s general budget for the fiscal year 2024, which were calculated on the basis of the average oil price of ($60) per barrel, stood at about RO 11.010 billion, constituting an increase of 9.5 per cent over the estimated revenues for the year 2023.
This was stated during the media briefing held by the Ministry of Finance on Monday. The total public spending for the state’s general budget for 2024 was estimated at approximately RO 11.650 billion, constituting an increase of 2.6 per cent over the estimated spending for 2023. The stated total public expenditure includes the debt servicing cost, which stands at about RO 1.050 billion.
The budget deficit was estimated at approximately RO 640 million, representing 6 per cent of total revenues and 1.5 per cent of the gross domestic product (GDP).
BALANCE
Sultan bin Salim al Habsi, Minister of Finance, said that the state’s general budget for the fiscal year 2024 takes into account the balance between a set of determinants and priorities while continuing to pay the public debt and reducing it as much as possible.
Al Habsi added that the 2024 state budget aims to improve the business environment and expand the participation of the private sector in the economic development, in addition to supporting the social aspect by enabling the Social Protection Fund to play its desired role as an umbrella for initiatives aimed at upgrading the level of insurance coverage and social protection for citizens, as well as maintaining the level of spending in basic services, such as education, health and housing.
The minister said that oil revenues in the 2024 budget constitute 54 per cent of total revenues, while the gas sector’s contribution amounts to 14 per cent and non-oil revenues represent 32 per cent of total public revenues.
He added that estimating these public revenues comes within the framework of the precautionary approach to reduce the burden of any financial challenges that may arise during the fiscal year 2024 and ensure that financing needs are met in the event of a decline in oil prices.
The minister pointed out that the total financing needs for the fiscal year 2024, based on the oil price approved in the budget, will stand at RO 2.2 billion, including the deficit and loan installments expected to be repaid during this year.
He noted that the ratio of public debt to the GDP stood at about 35 per cent, lower by 50 per cent by the end of 2023 than the ratio it reached at its peak in 2020, when it stood at about 70 per cent of the GDP.
FINANCIAL SURPLUS
The Minister of Finance said that the financial surpluses achieved as a result of the rise in oil prices were utilised to implement a solid plan according to which a large percentage of the debts were paid, in addition to implementing a number of postponed development projects. This was reflected in the projects of the 10th Five-Year Plan, whose commitments increased from RO 5 billion as it was at the beginning to more than RO 8 billion by the end of 2023. Priority was given to projects with a social dimension, such as education, health and social housing projects.
He pointed out that the total sums approved for these sectors in the 2024 budget stood at RO 4.635 billion, representing 40 per cent of the total spending.
The minister stated that the government measures taken during the last period were met by credit rating agencies with a series of positive credit rating reports. This contributed to mitigating the increase in interest rates that were supposed to be paid on loans. The total amounts paid for debt service from 2020 until the end of 2023 stood at RO 4.062 billion.
Al Habsi said, “In order to achieve the objectives of the 10th Five-Year Plan to realise “Oman Vision 2040”, and within the framework of the policy of supporting economic diversification sectors and encouraging the establishment of projects that contribute to this diversification, and linking this approach to governorate development projects, financial allocations were provided. These allocations consisted of raising the capital of the Development Bank to RO 500 million, raising the maximum lending limit from RO 1 million to RO 5 million, and providing a room to exceed this limit for development projects that add value to the local economy in the governorates of the Sultanate of Oman, in addition to launching a specialised investment fund (Oman Future Fund) with a capital of RO 2 billion”.
The minister affirmed that a programme called “Iskan” or “Housing” will be launched with a total value of up to RO 1.9 billion, with the prime aim of accelerating the pace of granting loans through Oman Housing Bank.
Abdullah bin Salim al Harthy, Under-Secretary of the Ministry of Finance, gave a visual presentation highlighting prominent global financial, economic and monetary indicators. He shed light on the decline in global economic growth to reach 2.9 per cent in 2024 and a decline in global inflation rates to 5.8 per cent.
He added that the average global oil prices, according to the expectations of international agencies during 2024, are expected to reach about $81 per barrel.
The under-secretary expected that the GDP at constant prices will grow by 2.3 per cent in 2023 and by 2.4 per cent in 2024. He touched on the preliminary results of the financial performance for the year 2023, which indicate achieving a financial surplus of about RO 931 million, against an estimated deficit in the state’s general budget of about RO 1.3 billion.
He said that the state’s public revenues during 2023 rose to RO 12.213 billion, constituting an increase of about RO 2.163 billion compared to what was approved in the budget for the same year. Public spending recorded RO 11.282 billion.
He added that net oil revenues in 2023 grew by 29 per cent to record about RO 6.883 billion, while net gas revenues increased by 43 per cent to reach about RO 2 billion.
Al Harthy stressed that the preliminary results of the financial performance for 2023 indicate that the government managed to reduce the public debt from RO 17.6 billion to RO 15.2 billion by paying about RO 2.4 billion, which led to saving RO 140 million from the debt servicing cost.
He explained that the net oil revenues in the 2024 budget are estimated at approximately RO 5.915 billion. The collection of net gas revenues is estimated at about RO 1.575 billion, and the collection of non-oil revenues estimated at approximately RO 3.520 billion.
The under-secretary at the Ministry of Finance pointed out that the 2024 budget allocated about RO 1.140 billion to the development budget and projects with a developmental impact. He added that the current expenditures in the 2024 budget are estimated at about RO 8.573 billion, constituting a percentage of 73 per cent of total public spending.
Meanwhile, the Minister of Finance affirmed that the government will continue to subsidise fuel prices. He added that RO 60 million have been allocated for the promotion of employees of the years (2013 and 2014), whose number reaches more than 52,000 employees. Starting from tomorrow, employees (seniority of 2013) will be promoted, while employees (seniority of 2014) will be promoted starting from July 2024.
The minister concluded, “It is expected that during 2024, about RO 1.6 billion will be paid from the public debt of the Sultanate of Oman. Employment in the government is based on the natural growth of projects and replacement, and that RO 36 million have been allocated in the 2024 budget for training programmes coupled with employment”. — ONA
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