As oil prices continue to decline, the sultanate looks to new ways to ensure financial stability
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 500 million rials ($1.3 billion) from lower expenditure, Khalid Al Busaidi, a financial policy official at the ministry, was cited as saying by state-run 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 $58, and prices are currently below $30.”
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Oman’s 2020 budget projected revenues at 10.7 billion rials and spending at 13.2 billion rials, ONA said.
The sultanate had said it was willing to deliver around 8 billion rials in liquidity to combat the effects of the virus. Still, Oman’s budget deficit is projected to reach near 17% of gross domestic product this year after a shortfall of 7% in 2019, according to the latest estimates by the International Monetary Fund.