A huge drop in oil revenue continues to take its toll on Oman’s economy, with the budget deficit surging by 43 per cent to RO4.37 billion in the first eight months of this year.
According to figures released by the National Centre for Statistics and Information (NCSI) earlier this week, net oil revenue from January to August dropped by 43.6 per cent to RO2.12bn. This compares to the RO3.77bn reported in the previous corresponding period.
Speaking to the Oman Daily Observer, Joice Mathew, an analyst at United Securities Market said: “Oil prices received a push only after August this year. The deficit may narrow in the coming months provided the oil price stabilises.”
In the first nine months of 2016, the price of crude was trading at about US$38. However, this has recovered to about US$50.
The Government projected a total deficit of RO3.3bn for the entire year.
However, Joice said: “The Government’s cost-cutting measures and slash in subsidies will help improve the situation in the medium term.
Meanwhile, the NCSI figures show that revenue from natural gas dropped 7.5 per cent to RO868.3 million compared with the same period last year.
Cost-cutting measures introduced by the Government this year include the abolition of fuel subsidies for consumers, cuts in defence and capital spending, as well as reducing salaries and benefits for public sector employees.
All GCC member countries, including Saudi Arabia and the UAE, are grappling with mounting budget deficits due to plunging oil revenues.