Budget 2024 aims to plug deficit, pay off debt

A Royal Decree by His Majesty Sultan Haitham bin Tarik ratifying the State’s general budget for fiscal year 2024 is a major step in charting the national course of action in the country on a scientific basis and sound planning that helps to continue the uninterrupted pace of development in the country.

The country is moving forward with its programmes and plans that are aimed at achieving a decent life for the citizens.

Fortunately, the State’s general budget contains more realistic indicators that respond positively to the global developments and change, and it is more tilted towards fulfilling the objectives of fiscal balance and wiping out the State’s public debt using the fiscal surpluses and eradicating its heavy burden that is estimated at more than RO 1 billion annually. This remarkable accomplishment shall be positively reflected on the country’s development system, which is extremely gratifying given the harbingers of fulfilling the highest national interests and fortifying the State’s financial standing both at home and abroad.

Unquestionably, one of the most important and complicated issues facing the State is managing its general budget and striking a careful balance between its obligations and its potential. To achieve these national objectives of fully repaying the debts, all pertinent parties must have a clear vision.

This is freedom in its absolute meaning, and therefore restraining the public expenditure has been a necessity of the stage in the light of the price of a barrel of oil that stood around $60 and as part of the precautions to be taken under such circumstances and the turbulent state of economy. Surpluses must be directed towards covering debts within the framework of economic stimulus policies if needed in the upcoming period to complete the efforts made in the past years.

These important points must be appreciated and respected, and thus there is a need to tighten the belt for a certain period of time in the context of the doctrine of necessity that is the top priority under the current sensitive situation.

The estimated revenue for the 2024 budget is about RO 11.010 billion, which is up 9.5 per cent compared with the estimated revenue for 2023. The total public expenditure was estimated at about RO 11.650 billion, up by 2.6 per cent over the estimated expenditure of 2023, as it includes the cost of servicing the public debt of approximately RO 1.50 billion, while the 2024 budget deficit was estimated at RO 640 million, which is 6 per cent of total revenues and 1.5 per cent of the GDP.

These efforts to reduce the deficit send a message that Oman is serious in its actions and keen to strike balance without affecting that national obligations aimed at providing the basic living requirements for citizens. Maybe this is the first time in the history of public budgets in the Sultanate of Oman, where the deficit, which we call it book deficit, is handled in a clear manner that takes into account that the oil prices will not fall below to $60 barrier per barrel.

Furthermore, the deficit issue in this year’s budget has been addressed in a way that takes into consideration the movements and actual field interactions of Opec and Opec Plus corridors, which have now absorbed the rules of the game in dealing with these highly sensitive aspects worldwide, especially that the government intends to pay off RO 1.6 billion of the total public debt. The reduction of public debt, as mentioned above, would achieve substantial financial profits that would generously be directed to the comprehensive development programmes.

Indeed, there are some economic impacts of these financial procedures that cannot be overlooked, as those are phases that countries are experiencing in one way or another in matters relevant to their own plans, policies and future requirements that are critical to understand and cooperate therein to accomplish them.

We hope that the State’s general budget will achieve its objectives and reflect national aspirations to fulfil the desired outcomes. Together, we will overcome and strive over current challenges, especially those related to policies of economic diversification and investment stimulation as part of policies aimed at enriching domestic markets.