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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Oman State Budget 2020 slashed by RO500 million

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ministry-of-finance

Muscat: As part of the new measures to cut expenditure in the Sultanate, the Ministry of Finance has decided to reduce the 2020 budget spending by RO 500 million.


According to decisions taken by the ministry, a 10 per cent cut in allocations for civil ministries and government departments and a five per cent cut in allocations for the


civil, security and military entities, have been effected in the revised budget.


Khalid bin Saif al Busaidi in the ministry’s department of financial policies said that the slump in the oil prices, which plummeted below the even less than $30 per barrel mark, has significantly battered the revenue estimates and widened the fiscal


deficit.


“The measures have been necessary to achieve financial sustainability and stability”, said Al Busaidi.


According to him, the government departments must seek the finance ministry’s approval before floating any new projects (tenders) or entry into any other financial obligations without prejudice to financial dues of firms or importers partnering with


the government.


These measures, Al Busaidi said, can reduce RO 500 million worth of estimated spending.


He said that the government took gradual steps to ensure proper followup of the implementation of the decisions by various departments.


“The government is trying to balance desired financial and economic objective”, he said. The ministry had issued 13 circulars and several directives to state departments since the beginning of the year with the aim of reducing spending in the state 2020 general budget.


Al Busaidi explained that the ministry issued instructions to rationalize spending in government firms in operation budgets and rescheduling of project execution


by advancing government priorities during the current stage, Al Busaidi said.


He hoped that these measures may help Oman to bypass the current crisis. But they may not hold for long if oil prices keep sliding as Budget 2020 estimates were based on $58 oil price. The current price of less than $30 will deepen budget deficit, said Al Busaidi.


The government may look at further financial and economic measures to face the crisis, Al Busaidi said, noting that State Budget 2020 estimated revenue at RO 10.7 billion and spending at RO 13.2 billion.— ONA


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