Muscat – Oman’s Ministry of Finance has unveiled the State’s General Budget for the 2025 fiscal year, projecting public spending at RO11.8bn, a 1.3% increase compared to the 2024 estimate.

The 2025 budget reflects the government’s commitment to achieving the economic and social objectives outlined in the 10th Five-Year Development Plan and Oman Vision 2040.

Of the total public spending, current expenditures are expected to amount to RO8.555bn, accounting for 72% of the total. Development and investment spending is projected at RO4.440bn.

Total government revenues are forecast to reach RO11.180bn, a 1.5% rise from 2024. These estimates are based on an assumed oil price of $60 per barrel and average daily production of 1mn barrels per day. Oil and gas revenues are anticipated to contribute RO7.607bn, while non-hydrocarbon revenues are expected to total RO3.573bn.

H E Sultan bin Salim al Habsi, Minister of Finance, said at a press conference that the budget aims to solidify financial sustainability measures while targeting real GDP growth of at least 3% in 2025.

He added that approximately RO5bn, or 42% of total public spending, has been allocated to social and basic sectors, with 39% earmarked for education, 28% for social security, and 24% for healthcare.

The minister also highlighted that RO557mn is set aside for social protection programmes, while RO1.14bn will be allocated to development projects with significant economic impact.

The “contribution and other expenses” category of the budget, which includes government subsidies, has been allocated an estimated RO2.345bn. This includes RO577mn for social protection, RO520mn for electricity subsidies, RO194mn for water and sanitation, RO35mn for fuel subsidies, RO15mn for essential food item subsidies, and RO73mn for housing and development loan interest subsidies.

H E Habsi further emphasised that funding would support governorates in implementing development programmes and help government entities create employment opportunities in both the public and private sectors.

Key development projects for 2025

Among the most notable projects for 2025 are the completion of 20 new government schools, the issuance of tenders for 22 additional schools, the completion of nine government hospitals, the expansion of the Muscat Expressway, and the construction of several new ports and dams.

Deficit forecast for 2025

The 2025 budget forecasts a deficit of RO620mn, equivalent to 5.5% of estimated revenue. Oman’s total financing requirements for the year are estimated at RO2.454bn, covering the deficit as well as scheduled loan repayments.

The RO620mn deficit will be financed through a combination of local and external borrowing (RO220mn) and a withdrawal of RO400mn from reserves.

It is anticipated that public debt repayments will total RO1.834bn in 2025.

2024 budget surplus at RO540mn

Preliminary results for the 2024 budget indicate a surplus of RO540mn, reversing the previously projected deficit of RO640mn. The Ministry of Finance noted that the additional revenue generated in 2024 has been redirected towards enhancing social spending and reducing public debt.

Oman’s general revenues in 2024 increased by 15.1% to RO12.674bn compared with the approved budget for the year, while public spending amounted to RO12.134bn.

The preliminary financial performance for 2024 also revealed a reduction in public debt from RO15.2bn at the start of the year to RO14.4bn by year-end, saving RO110mn in debt servicing costs.

The debt-to-GDP ratio decreased from 36.5% at the start of 2024 to 34% by the close of the year.