Deficit at five-year low

Muscat, Dec 30 – On the back of rise in government revenue and fall in spending, the budget deficit in the Sultanate dropped to five-year low. According to a report from the National Centre for Statistics and Information (NCSI), the deficit fell by 5.6 per cent to RO 1.92 billion till the end of October 2019. “The budget deficit for the same period of 2018 stood at RO 2.04 billion,” Oman News Agency reports quoting NCSI. The significant recovery in oil prices in the last couple of years, supported by the government’s actions to rationalise public expenditures, helped improve the fiscal balance.
The total revenue fell by 1.1 per cent to RO 8.60 billion for the first 10 months of 2019, over the same period of the previous year.
The net oil revenue of Oman government fell by 7.6 per cent to RO 4.97 billion at the end of October 2019, from RO 5.37 billion for the same period of the previous year, the report added.
Revenue from natural gas dropped 8.9 per cent to RO 1.43 billion. The introduction of the excise tax is one of the key fiscal reforms implemented in 2019 to raise non-oil revenue.
Customs duty and corporate income tax contributed RO 182.5 million and RO 593 million, respectively, during the period.
In addition, capital revenue fell to RO 62.9 million during the 10 months of 2019, falling by 46.9 per cent over the same period of 2018.
As far as expenditures are concerned, total public expenditure fell by 1.9 per cent to RO 10.53 billion till October 2019.
“This is against an expenditure of RO 10.73 billion for the same period of 2018,” the report points out.
Of this, current expenditure rose by 0.4 per cent to RO 7.35 billion, while investment expenditure fell by 5.8 per cent to RO 1.98 billion till October 2019.
The allocations dropped by 16.3 per cent to RO 560.5 million at the end of October 2019 from RO 669.6 million for the same period of 2018.
The government’s total public expenditure in 2018 stood at RO 13.59 billion, with a total revenue of RO 10.94 billion, leaving a deficit of RO 2.64 billion.
Fiscal deficit has persisted in Oman since 2014, but it has been declining over the last two years.