Oman reports budget deficit for first half of 2013
Oman posted a budget deficit of RO110.4mn for the first five months of 2013 against a surplus of RO1.58mn in the corresponding period of last year, according to data released by the National Center for Statistics and Information (NCSI).
The shortfall was the result of a marginal decline in government revenue even as public expenditure continued to rise.
Total public revenue fell 1.5 per cent during the five-month period to RO6bn from RO6.1bn in the same period last year.
"Average oil prices were higher in the 2012 period, and this is behind the decline in revenue in 2013," a senior Ministry of Finance official told Muscat Daily.
"The overall performance this year has been better. We have been able to compensate the decline in oil prices with higher production this year. The decline in revenue could have been higher if production had sustained at 2012 levels," the official added.
Net oil revenues inched down 0.4 per cent to RO4.45bn during the first five months, while gas revenue fell 21.6 per cent to RO605.9mn from RO772.8mn.
"In 2012, we received a lump-sum gas payment, which was an exceptional item and resulted in the decline in gas revenues in 2013," the official said.
Oman's average oil production rose 3.5 per cent to 929,000 barrels per day in the first five months of 2013, while the average price dropped 5.2 per cent to US$107.5 per barrel from US$113.5 in the same period of 2012.
Total public expenditure rose 3.6 per cent to RO4.69bn during the five-month period of 2013 from RO4.52bn in the 2012 period. Current expenditure increased 1.5 per cent to RO2.88bn, while investment expenditure rose 8.4 per cent to RO1.06bn. The actual expenditure under settlement stood at RO1.43bn.
The International Monetary Fund (IMF), in a recent report, said that with the projected downside risk of a sustained fall in oil prices, Oman needs to restrain spending growth and increase non-hydrocarbon revenues to support a sustainable fiscal policy in the medium term.
Non-hydrocarbon revenues accounted for less than 16 per cent of Oman's total public revenues during the first five months of this year.
The Fund said that higher current spending and relatively stable non-oil revenue have raised Oman's fiscal break-even oil price - the oil price needed to balance the budget in the medium-term.
Oman's 2013 general budget is based on a projected average oil price of US$85 per barrel, expected expenditure of RO12.9bn and a deficit of RO1.7bn.
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