Oman's Public spending rises 4% in 7 months

MUSCAT: The Ministry of Finance (MoF) has released its latest Monthly Bulletin titled “Fiscal Performance," providing an in-depth review of the State's General Budget as of the end of July 2024. The report highlights a 4 per cent increase in public spending, bringing the total to RO 6.754 billion. This increase, amounting to RO 273 million, is primarily attributed to significant rises in development expenditure, contributions, and other expenses.

The bulletin details the allocation of RO 786 million in financial subsidies aimed at strengthening the social protection system, supporting the electricity sector, and subsidizing petroleum products. This substantial allocation reflects the government’s ongoing commitment to social and economic support amidst a shifting fiscal landscape.

Despite the uptick in public spending, the Sultanate of Oman faced a slight decrease in general revenues. By the end of July 2024, public revenue totaled RO 7,154 million, marking a decrease of RO 29 million from RO 7,183 million recorded in the same period of 2023. This decline is chiefly attributed to reductions in gas and current revenues, which have impacted overall revenue collection.

The fiscal performance data from the bulletin reveals a mixed picture in terms of revenue sources. Total net oil revenue saw a notable increase of 9 per cent, rising from RO 3,714 million in 2023 to RO 4,038 million in 2024. This growth is attributed to the average realized oil price of US$ 83 per barrel and an average oil production level of 1,002 thousand barrels per day. Additionally, improvements in the revenue collection methodology by Energy Development Oman (EDO) have contributed to this rise.

Conversely, net gas revenue experienced a significant decline of 18 per cent, falling from RO 1,329 million in 2023 to RO 1,090 million in 2024. This decrease is due to changes in the methodology for collecting gas revenue, which has affected the overall figures. Current revenue also saw a reduction, decreasing by RO 120 million from RO 2,132 million in 2023 to RO 2,012 million in 2024.

The expenditure figures present a varied and complex picture. Current expenditure saw a minor decrease of 1 per cent, from RO 4,836 million in 2023 to RO 4,808 million in 2024. This slight reduction reflects a cautious approach to managing ongoing expenses. On the other hand, development expenditure experienced a significant increase of 33 per cent, rising from RO 491 million to RO 653 million. This substantial rise underscores the government's focus on investing in developmental projects and infrastructure.

Contributions and other expenses surged by 46 per cent, moving from RO 854 million to RO 1,243 million. This increase highlights a considerable rise in financial commitments beyond traditional expenditure categories. Conversely, expenses under settlement saw a dramatic decline of 83 per cent, dropping from RO 300 million to RO 50 million. This significant reduction suggests a notable decrease in outstanding or unresolved financial obligations.

Overall, total expenses experienced a moderate increase of 4 per cent, moving from RO 6,481 million to RO 6,754 million. This increase in total expenditure reflects the broader trend of rising costs associated with development and contributions, balanced against reductions in other expenditure categories.

The data presented in the "Fiscal Performance" bulletin provides a comprehensive overview of Oman’s fiscal health, revealing a complex interplay of rising expenditures and fluctuating revenues. The report highlights both the challenges and areas of growth within the country’s fiscal landscape, offering valuable insights into the ongoing economic adjustments and strategic financial planning.