37 per cent increase in public revenues

MUSCAT: In a recent Ministry of Finance report, the actual performance of the 2022 budget has been revealed, indicating a positive trajectory for the economy.

The report highlights a surge in public revenue and expenditure, driven by remarkable oil price and production increases. This development showcases a favourable economic landscape and sets the stage for potential growth opportunities.

The report unveils a significant boost in oil prices during 2022, surpassing expectations and resulting in a surge in revenue. The average oil price skyrocketed to $94 per barrel, marking a substantial increase of $44 from the projected amount of $50. This uptick can be attributed to favourable global oil market conditions, reflecting an optimistic outlook for the energy sector. Daily oil production exceeded the targeted amount, reaching 1,060 thousand barrels, further bolstering the revenue stream.

Public spending demonstrates growth and allocations

Public spending saw a noteworthy increase of 10 per cent compared to the approved budget, indicating a commitment to developmental initiatives and economic stability. The report reveals that current expenditure remained stable at RO 10,092 million, while development expenditure witnessed a significant rise to RO 1,306 million. This surge in development expenditure indicates a focused approach to investing in infrastructure, innovation, and sustainable growth. Furthermore, contributions and other expenses experienced an upward trend, amounting to RO 1,931 million, which highlights the government’s dedication to covering essential expenses and driving public welfare.

The Ministry of Finance report showcases an impressive 37 per cent increase in public revenue compared to the approved budget. This surge can be attributed to diverse revenue sources, including tax revenue, government investment returns, services fees, and capital repayments. Hydrocarbon revenue took the lead, constituting a significant 77 per cent of the total revenue. Net oil revenue witnessed an exceptional 70 per cent increase, reaching RO 7,625 million, while gas revenue rose by 29 per cent to RO 3,548 million.

Though representing 23 per cent of the total revenue, non-hydrocarbon revenue experienced a slight 2 per cent decrease, amounting to RO 3,300 million. This highlights the need for diversification efforts to reduce dependence on hydrocarbon resources and stimulate non-oil sectors for sustainable growth.

The report provides a comparative analysis of financial performance between 2021 and 2022, revealing significant improvements. Revenue surged from RO 11,195 million in 2021 to RO 14,473 million in 2022, showcasing a substantial 29 per cent increase. Concurrently, spending rose from RO 12,418 million to RO 13,329 million, reflecting a 7.3 per cent increase. These figures indicate a promising fiscal performance and underscore the government’s commitment to maintaining a balanced budget.

The Ministry of Finance report demonstrates the positive economic trajectory of the country, driven by surging oil prices and production. The revenue surge provides an opportunity for increased public investments in key sectors, fostering economic growth, job creation, and overall prosperity.

However, efforts to diversify revenue sources and reduce reliance on hydrocarbon income remain crucial for long-term sustainability.