Oman’s public revenues amounted to OMR8 billion ($20.78 billion) by the end of August 2024, up from OMR7.923 billion during the same period last year, mainly due to a rise in net oil revenue.
The Ministry of Finance‘s latest fiscal performance bulletin revealed that the state’s net oil revenues rose 12 percent to OMR4.64 in August. The average oil price during that period was $83 per barrel and the average oil production reached 1,001,000 barrels per day. Meanwhile, net gas revenues reached OMR 1.2 billion, down 15 percent annually due to the change in the methodology for collecting gas revenue.
Public spending rises
Oman’s current public revenues reached OMR2.2 billion, down from OMR2.334 billion during the same period in 2023.
The finance ministry also revealed that Oman’s public spending rose 7 percent year-on-year to OMR7.65 billion in August. Current expenditures of civil ministries amounted to OMR5.434 billion, down from OMR5.464 billion last year. Meanwhile, the development expenditure of ministries and government units reached OMR735 million, representing 82 percent of total development spending for the year.
Contributions and other expenses at the end of August 2024 amounted to OMR1.44 billion, up 58 percent compared to OMR914 million in the same period in 2023, due to the implementation of the social protection system in 2024.
Oman’s social protection system subsidy, electricity sector subsidy, and oil products subsidy amounted to OMR373 million, OMR295 million, and OMR191 million, respectively in August. The ministry also revealed that an amount of OMR266 million was transferred to the future debt obligations budget items.
Oman’s budget to report surplus
According to the Short-Term Energy Outlook (STEO) forecasts from the U.S. Energy Information Administration (EIA), the Brent crude oil spot price will average $83 per barrel in 2024 and $84 per barrel in 2025, further supporting Oman’s public oil revenues.
S&P recently expected Oman’s general budget to generate financial surpluses of 1.9 percent during 2024-2027. The agency also expected Oman’s real GDP to grow by an average of 2 percent annually during 2024-2027. Moreover, it expected the current account to record financial surpluses averaging 1.2 percent of GDP during the same period.
In September, S&P Global Ratings upgraded Oman’s credit rating to ‘BBB-‘ with a stable outlook. This upgrade marked Oman’s return to investment-grade status after nearly seven years.
The agency stated that the improvement in the credit rating is attributed to the continued measures to improve public finances through financial and economic reform initiatives and the restructuring of the government. These measures have helped restore the balance between revenues and public spending as outlined in the medium-term fiscal plan, leading to financial surpluses. Additionally, the government’s focus on reducing public debt, improving governance of state-owned enterprises, and lowering debt levels have all contributed to this positive outcome.
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