Oman budget deficit down sharply year-on-year in July

FILE PHOTO: General view of old Muscat, Oman, January 12, 2020. REUTERS/Christopher Pike/File Photo

DUBAI (Reuters) – Oman posted a year-to-date budget deficit of 1.2 billion rials ($3.13 billion) in July, a 22.2% annual decline in its fiscal shortfall, the ministry of finance said, as the country starts reaping the benefits of fiscal consolidation reforms.

Oman’s revenues increased marginally by 0.5% in the year to the end of July when compared to the same period in 2020, while oil revenues went up by 3.4% on the back of a rebound in crude prices after the coronavirus-driven slump in 2020.

“As fiscal consolidation continues, the public spending continues to decline,” the ministry said in a statement on Thursday. Total spending was down by 4.7% in the year to July, compared to the same period a year earlier.

The oil-producing Gulf state has embarked on a raft of measures in the past year to fix its debt-burdened finances and has asked the International Monetary Fund to provide technical assistance on its debt strategy.

The reforms – which included the launch of a value-added tax – have helped Oman raise billions of dollars in bonds and loans this year despite a yawning 2020 deficit of 19.3% of gross domestic product caused by lower oil prices and the coronavirus crisis.

($1 = 0.3840 Omani rials)

Source: Read Full Article