Oman’s estimated revenues for the 2024 general budget, calculated based on an average oil price of $60 per barrel, is estimated at more than RO11.010 billion—a 9.5% increase from the 2023 estimates, the country’s Ministry of Finance said on Monday.
The total public spending for the state’s general budget in 2024 was projected at about RO11.650 billion, marking a 2.6% increase compared to the estimated spending for 2023. This spending includes debt servicing costs amounting to around RO1.050 billion.
The budget is expected to have a deficit of about RO640 million, accounting for 6% of total revenues and 1.5% of the gross domestic product (GDP).
Sultan Salim Al Habsi, the Minister of Finance, explained that the 2024 budget balances various factors and priorities while focusing on debt repayment and reduction.
Oil revenues constitute 54% of the total revenues in the 2024 budget, while the gas sector contributes 14%, and non-oil revenues make up 32%.
Al Habsi emphasised that estimating public revenues follows a cautious approach to mitigate potential financial challenges and ensure financing needs are met should oil prices decline. He mentioned that the total financing needs for 2024, based on the approved oil price, are estimated at RO2.2 billion.
Public debt
Regarding public debt, Al Habsi noted that it currently stands at about 35% of the GDP, significantly lower than the 70% ratio observed in 2020. The government utilised surpluses from increased oil prices to repay debts and implement delayed development projects, prioritising social sectors like education, health, and social housing.
The budget allocated RO4.635 billion (40% of total spending) for these sectors in 2024.
Abdullah Salim Al Harthy, the Undersecretary of the Ministry of Finance, provided insights into global economic indicators, including an anticipated decline in global economic growth to 2.9% and global inflation rates to 5.8% in 2024. He highlighted an expected average global oil price of $81 per barrel.
The preliminary results for 2023 indicate a financial surplus of about RO931 million against an estimated deficit of about RO1.3 billion. Public revenues rose to RO12.213 billion, while public spending reached RO11.282 billion.
Al Harthy detailed that net oil revenues in 2023 increased by 29% to about RO6.883 billion, and net gas revenues rose by 43% to about RO2 billion. Additionally, the government reduced public debt by paying about RO2.4 billion, reducing the debt servicing cost by RO140 million.
Developmental projects
The 2024 budget foresees RO1.140 billion allocated for developmental projects and budgets. Current expenditures are estimated at around RO8.573 billion, constituting 73% of total public spending.
The government commits to continue fuel price subsidies. Furthermore, allocations of RO60 million have been designated for the promotion of employees from 2013 and 2014, with the promotions set to begin in January and July 2024, respectively.
The Minister concluded by mentioning expectations of paying about RO1.6 billion from the public debt in 2024, with employment in the government based on project needs and replacements. Additionally, RO36 million has been allocated in the 2024 budget for training programs associated with employment initiatives.