Oman: No End In Sight To Deficits Despite Spending-Slashing 2019 Budget

Oman plans to cut spending by 5.3% in its freshly-released budget for 2019, slightly more than the expected fall in revenue. The 2019 budget assumes $58/B, down from $69/B for 2018. Muscat would need $80/B to balance the budget.

Oman’s 2019 budget, ratified this week by the aging Sultan Qaboos, anticipates a $200mn reduction in the deficit to OR2.8bn ($7.3bn at the fixed rate of OR1=$2.596) from an estimated 2018 figure of $7.5bn, a 5% cut in real terms.

Though this implies a third consecutive reduction in the country’s deficit, the 2019 budget still projects a deficit of $7.3bn, over 9% of GDP (see table). And this is reliant on the sultanate achieving a highly-ambitious targeted spending cut of 5.3% in real terms. Oman’s ability to pull this off is questionable given that 2018 spending is slated to come in 5.6% above budget. (CONTINUED - 1007 WORDS)

DATA INSIDE THIS ARTICLE

table Oman's Finances ($Bn): Deficit Slated To Edge Lower In 2019 But Still Over 9% Of GDP
chart Oman Budgets For Modest Cut To Deficit For 2019 Despite Lower Oil Price Expectation ($Bn)
chart In $Bn
chart As % Of Total Spending