Oman’s budget deficit increased by more than 25 per cent in the first six months of this year amid a sharp plunge in oil revenues and corporate tax income.
The coronavirus pandemic and lower oil prices have hit the sultanate’s economy hard this year affecting government’s revenues from oil exports as well as corporate tax. The budget shortfall during January – June period of 2020 increased to RO826.5mn compared to RO660.6mn in the corresponding period of 2019, the figures released on Wednesday by the National Center for Statistics and Information (NCSI) showed.
The government’s total revenues in the first half of 2020 decreased by 12.4 per cent to RO4.830bn against RO5.514bn in the same period of last year.
As the oil prices sharply fell earlier this year due to weak global demand caused by the recession, Oman’s net oil revenue decreased more than 16 per cent to RO2.572bn in the first half of 2020 compared to RO3.074bn recorded in the first half of 2019. Gas revenue remained 21.2 per cent lower in the first half of this year at RO740.8mn compared with RO940mn in the same period of 2019.
As the private sector firms were badly hit by the COVID-19 lockdowns and restrictions, Oman’s revenue from corporate income tax dropped 33 per cent in the first half of 2020 to RO350.9mn from RO523.8mn in the same period a year ago. Income from customs duties also fell 15 per cent at RO83.8mn in the first six months of 2020 compared to RO98.3mn in the same period of 2019.
On the expenditure side, Oman’s total public expenditure was reduced by 8.4 per cent to RO5.656bn during January – June period of 2020 from RO6.174bn in the corresponding period of the previous year. Under the current expenditures, the expenditure of civil ministries increased 1.6 per cent to RO2.127bn, while the spending on defense and security decreased by 12.9 per cent to RO1.328bn in the first half of 2020. Interest paid on loans rose more than 47 per cent to RO410.3mn in the first half of this year against RO279mn in the same period of last year.
The total investment expenditure dropped 25.6 per cent to RO816.9mn in the six months ended June 30, 2020 compared with RO1.098bn in the first six months of the previous year.