Muscat: The 2022 Budget has registered a surplus of RO 210 million as of end-February 2022.
As of end-February 2022, public revenue amounted to RO 1,918 million, up by 75.6 percent compared to the same period in 2021.
According to the Ministry of Finance, this is a result of various factors:
During the period, oil prices averaged $ 81 per barrel compared to an average oil price of $ 42 per barrel over the same period in 2021.
The average oil production increased to 1,019 thousand barrels per day, compared to 953 thousand barrels per day during the same period in 2021.
An increase in gas revenue to RO 509 million, as a result of higher gas prices, increase in average gas production, and collection of gas revenue from Energy Development Oman.
An Increase in current revenue by 29.6 percent compared to the same period of 2021, supported by VAT receipts and higher collection of fees.
At the end of February, public spending increased by 10.2 percent, as compared to the same period in 2021, which has been driven by:
Interest payments of RO 186 million versus RO 148 million paid over the same period in 2021
Total investment expenditure for civil ministries amounted to RO 56 million at the end of February 2022
Expenditure on gas purchase and transport amounted to RO 123 million.
The country also managed to reduce public debt to RO 19.46 billion by end-April 2022
Budget 2022 allocated RO 4 billion to meet debt obligations, including the repayment of RO 2.7 billion loan principals and payment of RO 1.3 billion loan interests.
The Ministry of Finance (MOF), as part of its Debt Management Strategy, will reduce the public debt by more than RO 2.85 billion (US$ 7.4 billion) at the end of April 2022. The MOF also seeks to utilize the surplus arising from higher oil prices to reduce the fiscal deficit and minimize the cost and risks of the debt portfolio.
Repaid loans
RO 1.49 billion as of end-March 2022, including the repayment of a loan worth RO 850 million prior to its maturity.
RO 1.365 billion at the end of April 2022.
RO 1.55 billion, the value of the loan facility agreement signed in March 2022.
The Budget 2022 allocated RO 900 million for implementing development projects, representing the estimated amount to be paid during the year as per the actual work in progress for the projects. The development projects have been reprioritized in terms of their urgency, cost, and economic and social return, as per the table below:
According to IHS Markit, affiliated with S&P Global, global growth is projected to slow to 4.2% in 2022, owing to weaker performances in Western Europe, North America, mainland China, and Japan. The IHS Markit pointed out that most regions will experience a deceleration in 2022 with the exception of the Middle East and North Africa, where higher oil export revenues will spark a pickup in growth. The IHS Markit also stated that global real GDP growth will settle at 3.4 percent in 2023 and 3.1 percent in 2024 as fiscal and monetary policies tighten.
Oil prices are experiencing fluctuations due to the Russia-Ukraine conflict. Crude oil prices increased as high as US$ 128 per barrel at the beginning of March but dropped later to US 104 per barrel. Various international agencies forecast oil prices to average between US$ 101-135 per barrel over the short-term (2022-2023) in case the war between Russia and Ukraine continued.
S&P Global upgraded Oman’s credit rating from ‘B+’ to ‘BB-‘ with a stable outlook for the first time since 2015, as a result of improved fiscal and debt trajectory. The agency pointed out that the government’s fiscal reform program, higher oil prices, and rising hydrocarbon production are improving Oman’s fiscal and external trajectory. It also expects that Oman will achieve a fiscal surplus of 5.7% of GDP and the real GDP will grow by 3.9% in 2022