Source: Emirates 24/7
A surge in oil prices allied with higher crude output to widen Oman’s fiscal surplus by nearly 77 per cent in the first eight months of 2011 despite an increase in actual expenditure, official data showed on Thursday.
From around RO415.3 million ($1,08 billion) in the first eight months of 2010, the budget surplus soared to RO736.5m in the first eight months of 2011, the Omani ministry of national economy said in its monthly bulletin.
The surge was mainly a result of a 62 per cent rise in oil export earnings to nearly RO5.53bn from RO3.4bn as a result of a sharp rise in crude prices and Oman’s oil production to nearly 881,000 barrels per day from 858,000 bpd in the same period.High oil income boosted the country’s actual revenue by about 42 per cent to RO7.25bn from RO5.1bn.
Actual expenditure swelled by nearly 11.7 per cent to RO5.23bn from around RO4.68bn, the report showed.
A breakdown showed current expenditure expanded by 11.3 per cent while capital spending grew by 14.8 per cent. There was also an increase of 11.4 per cent in allocations for oil production and 6.9 per cent In a report last month, the Abu Dhabi-based Arab Monetary Fund (AMF), a key Arab League establishment, expected Oman to record a higher fiscal surplus through 2011 because of an increase in its crude output and nearly 40 per cent rise in oil prices above its budgeted price of $58 a barrel.
Oman, which is not an Opec member, had projected a shortfall of RO850m when it announced its record 2011 budget early this year.But it massively revised up the gap to RO1,850m after Sultan Qaboos approved new jobs and hefty pay rises for Omani government employees in response to demands during unrest in two months ago.
“Preliminary actual data for 2010 showed that Oman’s budget recorded a surplus of 3.2 per cent of GDP against a deficit of 3.1 per cent in 2009,” the AMF said.
“Initial estimates show that the surplus will expand this year compared with the previous fiscal year due to higher oil revenue….the surplus will increase despite a large rise in public spending announced by the government for this year.”In its latest report, Oman’s central bank said that the budget deficit for 2011 was revised up following approval of extra spending in April.
The central bank said the 2011 budget was based on an average oil price of $58 and production of 896,000 barrels per day.Oman, which controls around five billion barrels of oil reserves, expects to boost spending in its 2011-2015 development plan by a whopping 113 per cent as it expects high oil prices and is pursuing plans to boost crude output.
Announcing the eighth development plan early this year, Oman’s Minister of National Economy Ahmed bin Abdulnabi Mekki said it would aim to create between 200,000 and 275,000 jobs for Omanis, who have become a majority in their country after they were a minority two decades ago.
“The plan envisages spending of RO30bn, nearly 113 per cent above the budgeted spending in the previous plan,” he said.He said development expenditure would be as high as RO112bn, ibnncluding around RO5.6bn on new projects and the rest for development plans and ventures that were approved during the seventh five-year scheme.