Global Arab Network | Oman unveils $ 23 billion Budget, expects 7 % economic growth

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Oman unveils $ 23 billion Budget, expects 7 % economic growth

Global Arab Network - - Talal Abdullah

Tuesday, 03 January 2012 23:26

Oman unveils $ 23 billion Budget, expects 7 % economic growth

Global Arab Network - Darwish bin Ismaeel al Balushi, Oman Minister Responsible for Financial Affairs, unveiled RO 8.8 billion ($ 23 billion) State General Budget for 2012. The budget, drawn up at an assumed oil price of $75 per barrel, forecasts realising an estimated revenue of RO 8.8 billion against an expenditure of RO 10 billion. The budget aims to achieve an economic growth of 7 per cent, Global Arab Network reports according to a press statement.

With an increase of RO 1.5 billion over 2011, the general revenues of the state for the year 2012 has an increase of 21 per cent and the oil and gas revenues constitute 81 per cent of the total revenues, whereas the current and capital revenues constitute 19 per cent thereof.

Al Balushi outlined the plans and programmes for the Sultanate’s economic development at a press conference and laid stress on the fact that the Sultanate is pressing ahead with 6,500 development projects to be covered in the Eighth Five-Year Plan (2011-2015).

The minister laid stress on providing job opportunities to young Omanis and said the subject is one of the top spending priorities of the budget. “The budget for 2012 will offer job opportunity to 36,000 in the government civil and military apparatuses in addition to 2,000 jobs in the government companies.”

“Job opportunities in 2011 amounted to 94,000 of which 43,000 got jobs in the administrative and military apparatus of the state and 2,100 in the government owned companies,” he said.

The minister also dwelt upon the government’s focus on education and training and said that students’ intake in the colleges, universities and technical institutions has been increased and the students are being offered the best possible training and education to meet the requirements of the job market.

In the Budget 2012 the estimated expenditure on education sector amounts to RO 1.3 billion, which is 13 per cent of the total public expenditure including the spending on the basic and general education for 518,000 students as well as the spending on 85,000 internal and external missions including the existing and the additional missions that were approved at the end of the year 2011.

The budget also has provisions for 5,000 job-related training opportunities that are linked with the employment.

The estimated expenditure for the health sector amounts to about RO 500 million, ie 5 per cent of the total public expenditure; and total expenditure on social security and welfare amounts to RO 130 million for covering pensions of the social security and welfare cases.

The development budget includes approbations amounting to RO 120 million for constructing 2,500 housing units for the people with limited income.

The direct or indirect subsidy is estimated at RO 1.181 billion on vehicle fuel, diesel, cooking gas, electricity tariff, water tariff and food stuff commodities. Other subsidy subjects are: Interest on housing and development loans, equipment used by farmers and fishermen, purchase of forages, exemption from customs duties for some projects, exemption from income tax for some activities, operations of the National Ferries Company and travel tickets to Salalah and Khasab by Oman Air.

The oil revenues were calculated on the basis of average price $75 per barrel and average daily production of 915,000 barrels per day.

The general expenditure approved in the budget amounts to about RO 10 billion, with an increase of RO 800 million over the revised expenditure of the previous year 2011 (9 per cent). When compared with the original expenditure approved in the plan, the increase reaches RO 1.9 billion.

The current expenses amount to about RO 6.4 billion representing 64 per cent of the total general expenditures, of which RO 2.6 billion for covering the defence and security expenses and an amount of RO 3.5 billion for the current expenses of the civil ministries.

The investment expenses amounts to about RO 2.7 billion, ie 27 per cent of the total general expenditure, of which an amount of RO 1.4 billion for covering the spending on the development projects and an amount of RO 1.3 billion for covering the expenses of oil and gas production.

As regards to the deficit in the budget, it is estimated to amount to RO 1.2 billion, ie 50 per cent of the GDP and the deficit will be covered from the means of funding approved in the budget including the issuance of development bonds to the domestic market amounting to RO 200 million.

Commenting on the main features of the State Budget-2012 Al Balushi said: “The budget is approved in accordance with the objectives of the Eighth Five-Year Development Plan (2011-2015) and the estimates are consistent with the main directives and objectives of the plan and within the macro-framework of the plan.”

The budget, according to Al Balushi, “is aimed at stabilising the macro-economy and preserving the public finance balances and the gains achieved through the comprehensive development. It will balance the requirements of the economic development and social development and maintain the inflation at the same levels of 2011.”

“The plan will implement the economic diversification strategy and support the non-oil productive sectors to expanding the production base of the economy and generate employment opportunities for the nationals,” said Al Balushi.

Global Arab Network

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