Amid economic woes and downgrades from ratings agencies (MEES, 21 December 2018), Muscat managed to trim its first half deficit from $2.76bn (OM 1.06bn) in 2018 to a mere $1.72bn over the same period this year, recently released financial figures from Oman’s National Center for Statistics and Information (NCSI) show. This puts the sultanate well on track to undershoot its $7.3bn budgeted deficit for 2019 (MEES, 4 January), even if spending predictably rises in the second half of the year.

Oman’s efforts to rein in deficit spending certainly deserve praise, but a deeper dive into the numbers reveals more mixed trends. For one, higher oil and gas revenues accounted for 57% of the deficit decrease, leaving the country equally exposed to higher deficits if oil prices fall. Oman’s overwhelming dependence on hydrocarbons revenues is a key factor behind investors’ waning confidence in the sultanate’s economic outlook (MEES, 26 July). In Muscat’s defense, the government has managed to finally improve non-hydrocarbons revenues which grew from $3.01bn to $3.89bn. (CONTINUED - 255 WORDS)