Oman Slashes Spending For 2015, But Will More Cuts Be Needed?

Oman’s freshly-released 2015 budget envisages a record $6.5bn deficit. Spending will fall by 4.7% in real-terms and revenue by 18%. But even these figures are optimistic. MEES analysis suggests they imply an $80/B price for Oman crude, $30/B above current levels. Muscat will likely be forced to raid its relatively-limited foreign reserves.

Oman’s 2015 budget, released on 1 January, envisages total spending of OR14.1bn ($36.7bn at OR1=$2.60), compared to actual 2014 spending of OR14.5bn ($37.7bn), based on provisional 2014 figures contained in the 2015 budget statement. This implies a real-terms cut of 4.7% given expected 2015 inflation of 2%. Budget revenue of OR11.6bn ($30.2bn) for 2015 is slated to fall by a whopping 18.2% in real terms from OR13.9bn ($36.1bn) for 2014.


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