The sultanate’s 2018 budget estimates total public spending at RO12.5bn, increasing by RO800mn from estimated spending of RO11.7bn in 2017.
The budget framework supports the objectives of ninth five-year development plan: Achieving targeted growth rates, fostering an environment that stimulates investment in private sector, enhancing the role of private sector in economic growth, and creating jobs for the citizens, according to the budget statement issued by the Ministry of Finance on Monday.
Government’s total revenues are estimated at RO9.5bn for 2018, an increase of three per cent compared to expected actual revenues for 2017. Total revenues consist of oil and gas revenue of RO6.78bn (70 per cent of the total) and non-oil revenues of RO2.72bn (30 per cent of the total).
The budget estimates a lower fiscal deficit of RO3bn for 2018, or around ten per cent of the gross domestic product (GDP). Actual fiscal deficit for 2017 is projected to be around RO3.5bn.
‘In comparing the deficit during the three years (2016, 2017 and 2018), it’s clear that the deficit is declining. The estimated deficit for 2018 is lower than actual deficit of 2016 by RO2.3bn, or 43 per cent’, the Ministry of Finance said in its budget statement.
It said that RO2.5bn (84 per cent of estimated deficit) will be financed by external and domestic borrowings, while the rest RO500mn will be covered by drawing on reserves in 2018.
Current expenditures of the ministries and government units are estimated at RO4.35bn, down by one per cent as compared to budget approved for 2017. Current expenditures include salaries, annual allowances and entitlements of the employees of RO3.3bn and operating expenses of RO600mn.
According to the budget statement, the government has decided not to cut spending on development projects. This is to ensure the completion of all ongoing projects without delay, and make timely payments. ‘Spending for the implementation of development projects is estimated at RO1.2bn in 2018 budget, representing the estimated amount to be paid during the year as per the actual work in progress for the projects’.
The statement noted that several state-owned-enterprises are currently working towards implementing a number of projects during 2018, estimated to cost around RO3bn. ‘This will give a further boost to economic activity, accelerate economic growth and create more jobs’.
The 2018 budget estimates oil and gas production expenditures at RO2.1bn, an increase of 15 per cent compared with 2017 budget estimates. This includes the cost of oil and gas production and expenses required to maintain the future production levels and increase oil reserves.
The appropriations allocated for subsidies are estimated at RO725mn for 2018, nearly 84 per cent higher compared with 2017 approved allocations for subsidies.