Dubai, UAE – Oman’s government is devising new policies to ensure financial stability since spending cuts taken so far to offset the impact of the coronavirus pandemic will only bring temporary relief, a Finance Ministry official said.
A decline in oil revenue will raise the projected deficit by the end of the year in spite of savings of RO500mn from lower expenditure, Khalid al Busaidi, a financial policy official at the ministry, was cited as saying by Oman News Agency. He didn’t specify what new policies the sultanate is considering.
The moves will help overcome the current crisis but “won’t be enough as oil prices continue to decline,” he said. “The state budget estimates average oil prices at US$58, and prices are currently below US$30.”
Oman’s 2020 budget projected revenues at RO10.7bn and spending at RO13.2bn, ONA said.
The sultanate had said it was willing to deliver around RO8bn in liquidity to combat the effects of the virus. Still, Oman’s budget deficit is projected to reach near 17 per cent of gross domestic product this year after a shortfall of 7 per cent in 2019, according to the latest estimates by the International Monetary Fund.