Muscat: Oman has increased the total public spending to OMR 13.2bn for 2020, which is OMR300mn or 2% higher compared to the total spending estimated in 2019 budget.
The 2020 State Budget, which was approved by His Majesty Sultan Qaboos on Wednesday, is based on an oil price assumption of US$58 per barrel, estimates total revenues of RO10.7bn, an increase of 6 per cent compared to the estimated revenues for 2019.
According to a statement issued by the Ministry of Finance, the 2020 Budget is a bridge to Oman Vision 2040 and Tenth Five-Year Development Plan (2021-2025).
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The budget primarily focuses on maintaining fiscal sustainability, lower public debt and achieve higher economic growth to help in sustaining employment creation and stabilizing the inflation rate.
“The Budget seeks to continue to spur the national economy by maintaining investment spending levels, and also supporting economic diversification policy through expanding the participation of private sector so as to play a greater role in the economy and create more job opportunities”, it said.
76% on salaries
Total current expenditures of the ministries and government units are estimated at RO4.6bn for 2020. The salaries, annual allowance and entitlements account for 76 per cent of the total current expenditures of ministries and government units, with an amount of RO3.5bn.
Spending on development projects is estimated at RO1.3bn in the 2020 budget, representing the estimated amount to be paid during the year as per the actual work in progress for the projects.
Concern on oil price fluctuations
The Ministry of Finance expressed its concern over the global economic conditions and crude oil prices. “In spite of improvements experienced by oil markets in 2019, the Budget is still facing challenges posed by oil price fluctuations. This is due to the fact that oil revenue remains the main source of revenue for Oman. Therefore, any decline in oil prices will eventually have an impact on the 2020 Budget performance and national economy”, the statement added.
According to the preliminary results, the actual fiscal deficit for the year 2020 is projected to be around RO 2.5 billion, which is a reasonable eight per cent of the GDP and lower than 2019 budgeted deficit.
