Oman forecasts 2024 budget deficit despite higher revenue

Oman expects a budget deficit of OMR640 million ($1.66 billion) in 2024, 1.5 percent of the country’s gross domestic product (GDP).

Total revenues are projected at OMR11.01 billion, up 9.5 percent from 2023 estimates, with non-oil revenues estimated at OMR520 million, the state-run Oman News Agency reported, citing the finance ministry statement.

Oil revenues are projected to reach OMR5.92 billion in 2024, lower than OMR6.9 billion estimated in 2023.

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Expenditure is estimated to be OMR11.65 billion, an increase of 2.6 percent year on year.

The 2024 budget is calculated on an average oil price of $60 per barrel.

Finance minister Sultan Al Habsi stated that the budget estimates are designed to ensure that financing needs are met even if there is a decline in oil prices.

“The government will continue to pay the public debt and reduce it as much as possible.”

The preliminary results showed a budget surplus of OMR931 million in 2023, against an earlier estimated deficit of OMR1.3 billion.

In addition, the preliminary results indicated that the government reduced public debt from OMR17.6 billion to OMR15.2 billion in 2023.

The minister disclosed that the government expects to pay back OMR1.6 billion debt this year, adding that subsidies on fuel prices will continue.

Oman launched a medium-term fiscal programme in 2020 to reduce public debt, diversify revenue sources, and drive economic growth.

In November 2023, the International Monetary Fund said that Oman’s economic growth would rebound in 2024 on higher oil production and robust non-oil growth.

The Sultanate’s GDP growth is forecast to slow down this year to 1.3 percent from 4.3 percent in 2022 due to Opec+-related oil cuts.