IT’S TIME FOR SPENDING CUTS

TIGHTENINGNG UP: Sultanate must increase revenues from non-oil sector

Sept. 25: To stimulate economic growth,, Oman needs to curtail l public spending g and increase non-oil oil revenues.

While reviewing ng the implementation of decisions in the state’s tate’s budget for the fiscal year r 2016 at its third meeting of the he year, Financial Affairs and Energy Resources Council said that continuous drop in oill prices has affected the financialancial framework in the country. ry.

The meeting was held under the chairmanshiphip of Darwish bin Ismaeelaeel al Balushi, Minister ster Responsible for Financial ncial Affairs and also the Deputy Chairman of the Council. cil.

According to the Council, uncil, the average oil price in the first seven months of the current year ear stood at $36 against the budgeted eted price of $45.

“In this context, theh government t hash t to continue with measures to control public expenditure and increase non-oil revenues,” the Council said, while reviewing the present financial indicators in the country.

The general objectives of 2016 budget include measures to diversify revenue and rationalise expenditure, stimulate economic growth, and spend on high-priority socio-economic and development pro projects. While deficit was est estimated at RO 3.3 billion in 2016, which is about 13 per cent of the GDP, the deficit swelled to RO 2.540 billion in the first five mo months alone. The net oil revenue plungedplung 44.7 per cent to RO 1.287 b billion at the end of May from R RO 2.325 billion a year ago. Ga Gas revenues dropped 8 per cent to RO 546.2 million from RO 594 million. The C Central Bank of Oman projects that the government revenues may decrease by 25.9 per cent t to RO 8,600 million in 2016 fromfro the previous year’s budget budgeted revenues of RO 11,60 11,600 million. The aggregate exp expenditure is expected to dropdro 15.6 per cent to RO 11,90011 million from RO 14,10014 million during the sames period. The Council discusseddisc the basis and assumptions on whic which the budget estimates forf theth fi fiscal l year 2017 were made as the financial condition was affected by the continuing drop in oil prices. While reviewing issues related to oil and energy sector, the Council said that the most important of which are the study on national energy strategy. “Measures should be taken to enhance the economic value of the Sultanate’s energy resources,” the Council said.