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Sat 15 Mar 2014 02:16 AM

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Oman's budget surplus shrinks to $700m

Government surplus reduces in January due to higher spending and lower oil revenue

Oman's budget surplus shrinks to $700m

Oman's government budget surplus shrank to OR269.7 million ($700.5 million) in January compared with OR417.9 million a year ago due to higher spending and lower oil revenue, provisional government data showed.

The surplus accounts for 0.9 percent of the country's 2012 gross domestic product, according to a Reuters calculation based on the latest official data.

Analysts polled by Reuters in January predicted that the non-OPEC oil exporter would post a fiscal surplus of 2.9 percent of GDP in 2014.

Last month, a report by its central bank said Oman may have to start selling foreign assets or borrow on international markets in coming years if government spending rises during a period of lower oil prices and economic growth.

"The sultanate has to tolerate one of the options in the coming years if there is any prediction of decrease in GDP (gross domestic product) growth rates with an increase in spending," said the article in Al Markazi, a banking and economic publication.

In January it was reported that Oman is the latest Gulf state to review its fuel subsidy scheme as the sultanate tries to claw back its budget deficit.

According to official figures, the subsidy for petroleum products, mainly petrol and diesel, is projected to reach OR860m ($2.23bn) in the 2014 budget, up from OR740m last year.

Financial affairs minister Darwish bin Ismail Al Balushi was quoted by local media as saying: “The government will take a decision once the studies that take into account all aspects of the issue are complete."