Oman announced that the projected public revenue for the 2025 budget is set to reach approximately OMR11.180 billion ($29 billion). This projection reflects a strategic approach aimed at ensuring the government’s ongoing financial, economic, and social stability.
Sultan bin Salim Al Habsi, Oman’s minister of Finance, emphasized that the government remains focused on enhancing public finance metrics and achieving financial sustainability, while also pledging to uphold spending levels for essential services. He reiterated the government’s commitment to providing subsidies for electricity, water, wastewater, fuel, basic food items, and various social and insurance programs.
This was shared during a recent media briefing regarding the 2025 budget, hosted by the Ministry of Finance in Muscat, Oman News Agency (ONA) reported.
In his address, the minister noted that the projections for the state’s general budget for 2025 were formulated through collaborative efforts with the relevant authorities within the State’s Administrative Apparatus.
He added that these projections were informed by critical factors and data, based on an average oil barrel price of $60, marking a 1.5 percent increase over the estimated revenues for 2024.
Al Habsi pointed out that oil revenues account for 52 percent of total revenues, while the gas sector contributes 16 percent, and non-oil revenues make up 32 percent of total public revenues.
Regarding public expenditure, the state’s general budget for 2025 is estimated at OMR11.800 billion, reflecting an increase of about OMR150 million over the public spending approved in the 2024 budget.
He highlighted that, according to these estimates, the 2025 budget will incur an estimated deficit of OMR620 million, which will be financed through borrowing OMR220 million and withdrawing OMR400 million from reserves.
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Allocation for social services
The Minister of Finance stated that the state’s general budget for 2025 allocates approximately OMR5.004 billion for social services, distributed across education, health, housing, and social welfare sectors, marking a 4.2 percent increase over the allocations approved for 2024.
Funding for senior employee promotions
In response to questions from journalists, the minister revealed that the 2025 budget includes funding to promote senior employees from 2015-2016, with 4,000 positions anticipated in the education sector for 2025.
Inflation control measures
Al Habsi further noted that, in line with efforts to control inflation and maintain it at low levels, the State’s General Budget for fiscal year 2025 includes financial allocations for subsidies totaling OMR1.580 billion. This includes OMR577 million for the Social Protection Scheme, OMR520 million for electricity sector subsidies, and OMR194 million for water and wastewater sector subsidies.
Comprehensive subsidy allocations
Additionally, OMR82 million is allocated for transportation sector subsidies, OMR73 million for supporting development and housing loan interests, and OMR59 million for waste sector support, with remaining subsidy allocations directed toward supporting petroleum products and food commodities, among others.
Decentralized development initiatives
The Minister of Finance explained that to promote decentralized development in the governorates, in accordance with Royal Directives, an allocation of OMR20 million has been designated for each governorate throughout the 10th five-year plan, totaling OMR220 million. Of this, OMR147 million has been committed, representing 68 percent of the approved amount as of the end of 2024.
Outstanding loans overview
The minister stressed that the 2025 budget underscores the Development Bank’s ongoing financing of value-added projects by increasing the loan portfolio and enhancing lending levels, with a proposed allocation of OMR80 million to boost the bank’s capital for 2025.
In this context, he noted that the Development Bank had more than 22,000 outstanding loans by the end of 2024, and its portfolio reached over OMR277 million as of November 2024, an increase of 34 percent compared to the portfolio size at the end of June 2023.
Iskan program success
Further, the Minister of Finance mentioned that the (Iskan) program, launched in collaboration with Oman Housing Bank last year, saw a 23 percent increase in the bank’s lending portfolio by the end of December 2024, totaling over OMR855 million.
He elaborated that preliminary data indicates the gross domestic product (GDP) at constant prices grew by 1.9 percent by the end of the third quarter of 2024, amounting to approximately OMR28.146 billion, compared to OMR27.632 billion for the same period in 2023.
Inflation rate trends
On the subject of inflation, the minister reported that data from the National Centre for Statistics and Information (NCSI) showed an inflation rate of around 0.6 percent in the Sultanate of Oman until November 2024, down from about 1.1 percent in the same period of 2023. This sustained low inflation rate is attributed to government measures aimed at controlling prices, including subsidies for petroleum products, electricity, and water, as well as support for basic commodity prices.
Foreign direct investment growth
Regarding foreign direct investments (FDI), the minister noted that due to the government’s efforts to streamline processes and adhere to announced programs over recent years, preliminary data indicates that as of the end of the third quarter of 2024, the volume of FDI in the Sultanate of Oman reached OMR26.677 billion, reflecting a 16 percent increase compared to the same period in 2023.
Subsequently, Abdullah bin Salim Al Harthy, undersecretary of the Ministry of Finance, delivered a visual presentation that highlighted key financial, economic, and monetary indicators as well as preliminary results for the State’s General Budget for fiscal year 2024 and the 2025 budget, along with potential financial and economic risks and initiatives aimed at enhancing the state’s public finance management.
Oil price forecasts, projected GDP figures
The undersecretary indicated that global oil price forecasts predict average prices, according to international agencies, will range from $70 to 80 per barrel throughout 2025.
Al Harthy projected that the GDP of the Sultanate of Oman at constant prices is expected to reach approximately OMR38.390 ($99.7 billion) billion by the end of 2024 and around OMR39.426 billion ($102.4 billion) in 2025.
Goals of the 2025 budget
Additionally, Al Harthy clarified that the financial and economic goals of the 2025 budget are to preserve the level of essential social services provided by the government, maintain the level of government subsidies for electricity, water, fuel, and food commodities, support urban development, facilitate greater home ownership for citizens, and continue the government’s plan to empower the National Employment Program, ensuring insurance coverage and equitable social protection for all segments of society.
Al Harthy noted that the estimated public spending items for 2025 include OMR8.555 billion for current expenses, approximately OMR900 million for development expenses, and about OMR2.345 billion for contributions and other expenses, which collectively constitute 20 percent of total public spending.
He stressed that the State’s General Budget for fiscal year 2025 aims to uphold financial, economic, and social stability in alignment with the financial framework of the 10th five-year Development Plan (2021-2025) and Oman Vision 2040, while achieving a range of economic and social objectives.
He stated that the 2025 general budget has allocated around OMR5 billion for spending on social and basic sectors, reflecting a 4.2 percent increase compared to the approved budget for 2024, which was approximately OMR4.8 billion.
Social spending distribution
The undersecretary further explained that spending on the social and basic sectors constitutes 42 percent of the total public spending approved in the 2025 budget, with distributions as follows: 24 percent for health, 9 percent for housing, 28 percent for social security and welfare, and 39 percent for education.
He confirmed that the total payments made to private sector firms in the Sultanate of Oman by the end of 2024 reached OMR1.631 billion.
Initiatives for job seekers
In terms of supporting initiatives for job seekers in the private sector, the approved budget for 2025 allocates about OMR50 million to these initiatives, in addition to amounts collected from transferring 1.2 percent of the value of purchase invoices from the oil and gas sectors, government units, and companies affiliated with the Oman Investment Authority.
Financial performance surplus
Regarding the Governorates Development Program, Al Harthy emphasized that Royal Directives have called for increasing financial allocations for the program from OMR10 million to OMR20 million for each governorate during the 10th five-year Development Plan. This is intended to implement strategic programs aimed at the sustainable development of governorates and cities, as well as to enhance their comparative competitive advantages.
Moreover, he noted that preliminary results from the financial performance for 2024 revealed a surplus of approximately OMR540 million, in contrast to the estimated deficit in the State’s General Budget for fiscal year 2024, which was about OMR640 million.
He added that the state’s general revenues for 2024 rose to OMR12.674 billion, surpassing the approved figure in the budget for the same year, which was OMR11.010 billion.
Furthermore, he mentioned that the average oil price reached $82 per barrel, compared to the $60 per barrel outlined in the 2024 budget, while public spending totaled around OMR12.134 billion, exceeding the approved OMR11.650 billion.
Allocation of additional revenues
Al Harthy specified that approximately OMR468 million of the total additional financial revenues were allocated to enhance social spending and stimulate economic growth. This was distributed as follows: OMR176 million for increased support for petroleum products, OMR125 million for electricity, water, wastewater, and waste sector support, OMR50 million to boost allocations for the Ministry of Social Development for low-income families and social security beneficiaries, OMR111 million for health and education sector budgets to accommodate expanding services, and OMR6 million to exempt 532 loans for small and medium enterprises from the Development Bank and the Authority for Small and Medium Enterprises Development for 2024.
Reduction in public debt
Al Harthy pointed out that the public debt situation in the Sultanate of Oman has seen positive developments, owing to the continuous implementation of various government measures and initiatives that have helped rationalize and enhance spending efficiency, increase non-oil government revenues, and benefit from rising oil prices. This has made it feasible to channel part of the additional revenues toward reducing public debt and substituting high-cost government loans with more affordable options.
He stated that the Ministry of Finance is dedicated to fulfilling public debt obligations as per the approved borrowing plan, including repaying OMR355 million in external loans before their maturity, settling OMR600 million in government development and local bonds due, and issuing government development and Ijarah bonds totaling OMR705 million in accordance with the approved borrowing plan.
He added that preliminary results for the financial performance in 2024 indicate a reduction in public debt by roughly OMR800 million, bringing it down to OMR14.4 billion from OMR15.2 billion at the start of 2024. The ratio of public debt to GDP has decreased to 34 percent, and the public debt service cost has fallen to approximately OMR940 million, compared to the approved budget for 2024 of about OMR1.050 billion.
New government financial system
Abdullah bin Salim Al Harthy, undersecretary of the Ministry of Finance, confirmed that the ministry will commence the pilot operation of the unified government financial system “Maliya” with certain government institutions, aiming for actual implementation at the start of 2026, coinciding with the launch of the 11th five-year Development Plan, and completion by 2030. This new system will establish a unified government portal for all supporting financial systems, representing a modern electronic approach to managing public finances in the Sultanate of Oman, utilized for planning, execution, monitoring, and reporting related to the state’s general budget, with the goal of enhancing public finance management in alignment with Oman Vision 2040.
