Like much of the region, Oman’s public finances took a devastating hit in 2020 evidenced by preliminary full-year figures released this week. Revenues fell $5.5bn (23.5% in real terms) against 2019’s $27.5bn and coupled with an inability to rein in spending this caused the deficit to jump to a four-year high $10.9bn deficit (see table).
Unlike its wealthier neighbors, the sultanate lacks the resources to cope with low oil prices. Even prior to the pandemic the sultanate’s rising debt was a concern (MEES, 4 January 2019). Last year’s heavy borrowing has further exacerbated this and the IMF estimates that Oman’s public debt has now passed $50bn for the first time and will close in on $60bn by the end of 2021 (see chart 1). (CONTINUED - 858 WORDS)