Oman sees 2023 budget deficit at 3% of GDP

For 2022, the government is estimating a fiscal surplus of OR1.15 billion, with revenues at OR14.2 billion and spending at OR13.9 billion — estimating the average oil price this year at $94/barrel

By Reuters

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While oil prices have softened in recent weeks after highs of over $100/barrel over the course of this year, Oman’s oil price assumption for its 2023 budget appears conservative.
While oil prices have softened in recent weeks after highs of over $100/barrel over the course of this year, Oman’s oil price assumption for its 2023 budget appears conservative.

Published: Tue 20 Dec 2022, 3:42 PM

Last updated: Tue 20 Dec 2022, 6:47 PM

Oman is forecasting a OR1.3 billion ($3.39 billion) deficit in its 2023 budget, or three per cent of gross domestic product, following an expected surplus this year after higher oil prices boosted revenues.

State media reported the Gulf state expects revenues of OR11.7 billion and expenditure at OR13 billion next year, based on an average oil price assumption of $55 per barrel.


Budgeted spending next year is seven per cent above the approved spending for 2022, state media reported, citing the finance ministry.

For 2022, the government is estimating a fiscal surplus of OR1.15 billion, with revenues at OR14.2 billion and spending at OR13.09 billion — estimating the average oil price this year at $94/barrel.


Oman, one of the Gulf’s weaker economies, swung to a budget surplus in the first half of 2022, easing pressure on public finances and improving its ability to meet debt obligations.

The IMF expects Oman to post fiscal and external surpluses in 2022 and over the medium term, due mainly to higher oil revenue, fiscal discipline and the introduction of value added tax.

Last month, S&P Global upgraded Oman’s credit rating to BB, from BB-, on improved fiscal performance and lower public debt.

While oil prices have softened in recent weeks after highs of over $100/barrel over the course of this year, Oman’s oil price assumption for its 2023 budget appears conservative.

Goldman Sachs, in a note dated December 12, sees Brent crude averaging $83 per barrel over the next five years as its base case scenario.

$5b sovereign fund spending

Meanwhile, Oman Investment Authority (OIA), the Gulf state’s sovereign wealth fund, aims to spend RO1.9 billion ($4.95 billion) on investment projects in 2023, state media reported on Tuesday.

The OIA said financing for the investment projects will come from the local and foreign private sector, from financing institutions, or from the agency itself or its subsidiaries. The investments will include about 65 new and existing projects in sectors including logistics, food and fisheries, energy, mining, services, and communications and IT.

The sovereign wealth fund also expects to exit eight investments in 2023, with estimated returns exceeding half a billion rials. Three of the investments are in the energy sector, three are in the aviation, industry and tourism sectors, while the remaining two are in the communications and information technology sector.

A senior executive at the wealth fund told Reuters in October that the OIA is considering investing in the United Kingdom’s technology sector to take advantage of valuations, and was close to investing in a port in Zanzibar. — Reuters


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