Financial data of government monthly accounts until the end of April 2020 showed that government total revenues stood at 3.82 billion OMR. This figure is less by 47 million OMR compared to the corresponding period in 2019.
A statement issued by the Ministry of Finance indicated that the stability of government revenues during the first four months of this year was due to crude sale prices, which averaged $63.36 by the end of April 2020 (which is the average of trading prices from October 2019 to January 2020).
The stability of revenues was also due to the reception of returns from the partial privatisation of Oman Power Transmission Company, the operation by virtue of which 49% of the firm’s shares were privatised, generating a sum of 365 million OMR.
Actual general expenditure by the end of April 2020 stood at 3.69 billion OMR, with an increase of 314 million OMR or 8% of actual general expenditure during the corresponding period in 2019.
It is worth noting that the measures undertaken by the government to control rates of general spending and liquidity during that period enabled the reduction of general spending in some segments by 461 million OMR.
In turn, spending in other segments rose by 147 million OMR, particularly in loan interest segment.
The statement proceeded on saying that, by calculating the difference between revenues and actual spending during the first four months of 2020, it is observed that the budget posted a surplus of 134 million OMR until the end of April 2020, compared to a deficit of 133 million OMR during the corresponding period in 2019.
It is worth noting that this fiscal surplus is considered a temporary surplus based on oil revenues and other measures undertaken by the government to alleviate the impact of sharp decline in international oil prices and to ensure adapting to financial situations associated to corona-virus (COVID-19) pandemic. The procedures included restructuring spending priorities and increasing revenues from an exceptional, non-recurring privatization operation. It should be noted that the impact of the slump in oil prices with effect from February 2020 will reflect on the state budget with effect from May 2020 accounts.
It is expected that average annual oil price for this year (2020) will be $45, which entails a fiscal deficit reaching more than 4 billion OMR, compared to an estimated deficit of 2.5 billion OMR as at the beginning of this year.
The Ministry of Finance is following up the fiscal impact of government measures undertaken to bring down general expenditure this year. The Ministry is also considering more procedures as deemed appropriate in accordance with global economic and financial developments and their impact on the Sultanate. In the meantime, the Ministry will continue to implement the deficit financing plan approved by the Financial Affairs and Energy Resources Council.
