Oman budget surplus widens to US$2bn

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(Bloomberg Images)

(Bloomberg Images)

Oman booked a budget surplus of OMR768m (US$2bn) in the first two months of 2012 as robust oil prices boosted revenue, finance ministry data showed on Sunday.

The surplus is equivalent to about 2.7 percent of the sultanate's 2011 nominal gross domestic product, according to Reuters calculations. The country posted a surplus of OMR467 m in January.

Analysts polled by Reuters in March expected the non-OPEC oil producer to post a fiscal surplus of 5.0 percent of GDP in 2012 thanks to high crude prices, up from 3.5 percent last year.

Oman has raised its budget by 23 percent to OMR10bn this year compared to its original projection for 2011. The 2012 plan includes almost 96 percent of last year's actual expenditure, which was boosted by extra spending following protests demanding more jobs and an end to corruption.

The Gulf Arab sultanate's budget income jumped by nearly 31 percent to 1.9 billion rials in January-February compared to the same period last year. It already accounts for 21 percent of the initial full-year projection, the data showed.

Net oil revenues surged 43 percent to OMR1.5bn. Oman sold its oil at an average price of US$109.1 per barrel in January-March, up from US$88.4 in the first three months of 2011, the oil and gas ministry's data show.

Government spending increased 8 percent to OMR1.1bn in January-February, accounting for 11 percent of the full-year plan.

The ministry initially set 2011 spending at 8.1 billion rials. But social unrest prompted Sultan Qaboos bin Said, a US ally who has ruled Oman for 42 years, to pledge an extra US$2.6bn of spending in April 2011.

Oman, which obtained pledges in March 2011 for US$10bn in aid over 10 years from its wealthier Gulf neighbours, forecast a budget deficit of OMR1.2bn for 2012, or 4.3 percent of GDP, based on a projected oil price of US$75 per barrel.

The International Monetary Fund projected in December that Oman's budget break-even oil price, the minimum price which it needs to balance its budget, would rise to US$105 by 2016 from US$81 per barrel in 2012.

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