Oman may have to turn to selling its foreign assets, or borrowing on the international market, to sustain its government spending, should oil prices slide, an article in the January-February 2014 issue of the Central Bank of Oman’s (CBO) own Al-Markazi journal says.
The need to raise funds to finance soaring government expenditure in the budget, especially if oil revenue drops, is not new. Finance Minister Darwish al-Balushi last May hinted that the government may consider issuing dollar bonds in 2014. Again he reiterated this course of action in his budget speech in early January, when he said that the 2014 budget authorizes the government to borrow up to OR400mn ($1.04bn), half of which would come from the international market and the other half from the domestic market. Raising domestic debt could be in the form of development bonds, or Shari’a compliant Sukuk, the minister said (MEES, 10 January). (CONTINUED - 720 WORDS)