The Sultanate of Oman… $3 billion in surplus in the 2022 budget

The budget approved at the beginning of last year expected a deficit of 1.55 billion riyals.

The surplus in the Omani budget came after an increase in actual revenues by 37 percent compared to estimated revenues, to record 14.473 billion riyals, while actual public spending amounted to 13.329 billion riyals.

The agency stated that the actual spending increased by 10 percent over the estimated expenditures as a result of the increase in oil products support expenditures and additional appropriations to cover the inevitable and necessary expenses of some government agencies.

She added, “The government will direct the additional financial revenues to accelerate the pace of stimulating economic growth, increase government support for fuel and basic commodities, reduce public debt, and manage the lending portfolio.”

Oman’s budget received a strong boost from the rise in oil prices last year, which encouraged credit rating agencies to improve the outlook for the Sultanate, especially after it paid off 1.1 billion Omani riyals ($2.86 billion) of loans in the first quarter of this year, thus reducing the volume of public debt. At the end of March, it amounted to 16.6 billion riyals, or 43.1 billion dollars.

Oman’s Finance Ministry said in April that the country was able to repay these debts, depending on the increase in government revenues after the rise in oil prices.

During the current month, Moody’s Investors Service raised the credit rating of the Sultanate of Oman one notch to Ba2, attributing this to stronger financial indicators in light of unexpected revenues from hydrocarbons.

“The increase reflects improvements in Oman’s debt burden and debt sustainability indicators during 2022, mainly due to large unexpected gains from oil and gas revenues, which increase the country’s ability to withstand potential future shocks,” Moody’s said.

The agency maintained a positive outlook for the country.

Earlier in April, Fitch Ratings revised its outlook on the Sultanate of Oman from stable to positive and affirmed its rating at (BB).

The global rating agency said that the positive outlook for the Sultanate reflects the decline in government debt relative to the gross domestic product, with the rise in oil prices, the imposition of spending restrictions, and the reduction of external liquidity risks.

In turn, the rating agency, Standard & Poor’s, modified its outlook for the Sultanate of Oman to positive, from stable, at the beginning of last April, saying that the government was carrying out reforms in its budget and reduced the total debt ratio to 40 percent of GDP in 2022 from about 60 percent in 2021. .

The agency expected that the GDP growth of the Sultanate of Oman would reach about 2.5 percent annually, on average, between 2023 and 2026.

Oman launched a medium-term financial plan in 2020 to reduce public debt, diversify sources of revenue and stimulate economic growth.

It is noteworthy that the data of the Ministry of Finance in the Sultanate of Oman, this month, showed that net oil revenues rose nine percent in the first quarter of this year, driven by the increase in oil prices and production, which helped the Sultanate achieve a budget surplus of 450 million Omani riyals ($ 1.17 billion). During that period.