By the end of February 2021, total public revenue amounted to RO 1,092 million, decreased by 21.6% as compared to the same period of 2020. This is mainly due to a decline in net oil revenue by (35%) of total revenue, as a result of low oil price and the implications of the COVID-19 pandemic.
State budget records RO 1 billion of total revenue as of end-February 2021 fiscal performance (As of end-February 2021)
Net oil revenue generated until the end of February 2021, after deducting partners’ shares as per the exploration and production sharing agreement (EPSA), amounted to RO 603.4 million.
The State’s General Budget records a reduction in gas revenue by 2 percent as of end-February 2021, compared with the same period of 2020. While current revenue increased by 8.1%.
By the end of February 2021, the State’s General Budget sees a drop in public spending by 8.8% as compared to the same period of 2020. This is as a result of several factors, including a reduction in spending of various government units.
2021 Budget has allocated RO 1.2 billion to public debt servicing, which will be paid in accordance with an approved payment schedule.
Oman has set within its financing plan to cover a budget deficit of RO 2.2 billion and repay the principal of a loan of RO 2 Billion.
Consequently, the total required financing for this year amounts to RO 4.2 billion, which is planned to be obtained through various financing instruments, in addition to an amount of RO 600 million withdrawn from Oman Investment Authority (OIA).
As of the end of March, total obtained finance amounted to RO 2.37 billion, of which RO 1.77 billion represents total loans, while an amount of RO 600 million was received from OIA. This shows that Oman has successfully covered most of its financing needs. The remaining amount of RO 1.83 billion will be raised during the current year.
By the end of February, an amount of RO 144 million paid for public debt servicing, and an amount of RO 563 million repaid for the principal of some loans.
The State’s General Budget has allocated RO 900 million for development projects, representing the cash to be disbursed in 2021 according to the actual implementation rates. The priority, cost, and economic and social return of each project have been taken into account.
The Organization for Economic Co-operation and Development (OECD) prudently upgraded its 2021 economic forecast in last March. According to OECD, the global economy will recover and grow by 5.6% in 2021 and 4% in 2022, compared with previous forecasts of 4.2% this year and 3.7% in December 2022.
The revised forecasts come amid an accelerated pace of vaccination.
The OECD claims that the faster countries can vaccinate, the faster they can reopen and resume normal economic activity. Moreover, OECD stressed the importance
of speeding up vaccinations to prevent COVID-19 variants from causing new outbreaks.
In March 2021, the Government has endorsed an economic stimulus plan aiming at accelerating economic recovery and enhancing economic activities performance affected by the COVID-19 pandemic and continued low oil prices.
In light of the current unfavorable conditions, the government seeks, through the plan, to mitigate the implications of the pandemic on the national economy, notably the small and medium enterprises (SMEs) by providing an incentive package. Such package limits Government purchasing contracts worth less than RO 10,000 to SMEs only. In addition, the Government has made some decisions within the plan to reduce some fees and tax rates in order to encourage the private sector to invest more in the
economic diversification sectors.
As part of the Government’s efforts to improve economic growth, a national program was launched, under the directives of His Majesty the Sultan, with the aim to attract private investments and enhance the presence of Omani exports in foreign markets. This will eventually support the national economy, create
more jobs and further diversify the sources of income.
Oman was ranked 71st globally, rising five places, in the Index of Economic Freedom, issued annually by the Heritage Foundation.\
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