Oman Announces 2021 Budget with $28 Bn in Expenditures

Business

January 2nd, 10:54am

Muscat – Asharq Al-Awsat

A view of the city of Nizwa, Oman. (File photo: AFP)

Oman announced its 2021 state budget with expenditures of up to $28 billion, an 18 percent drop from the previous year. The government expects revenues of about $22 billion based on an oil price of $45 per barrel, a 19 percent decline from 2020, according to the official Oman News Agency. Following the financial and economic initiatives implemented last year, along with the economic diversification programs and the initiatives that will be implemented in 2021, the 2021 budget deficit is estimated at $5.7, or 8 percent of the GDP. Oman is looking into borrowing that will cover 73 percent, or $4.2 billion, with the remaining $1.5 billion to be drawn from its reserves. The public debt is expected to reach about $56.2 billion by the end of 2021, with external borrowing accounting for 76% of the total public debt. The Ministry of Finance announced that the 2021 budget was prepared in accordance with the main objectives of its tenth five-year development plan (2021-2025) and Vision 2040. The statement indicated that the plan focuses on mechanisms and programs for economic diversification and increasing the contribution of non-oil sectors and activities, which will enable the national economy to achieve its targeted growth rates. The Ministry indicated that the government has taken a number of financial and economic measures to confront the repercussions of the coronavirus pandemic and the continuous decline in oil prices. The plan seeks to reduce the budgets approved for civil, military, and security agencies by 10 percent and reduce the development budget by 10 percent as well. It will also drop the operating and administrative expenses of government facilities by 10 percent. The Ministry asserted that the plan seeks to stimulate economic activity, with a priority to the implementation of projects that serve economic and social goals, increase the involvement of the private sector, and enhance its role. The tenth five-year development plan (2021-2025), is the first executive plan for Vision 2040, which aims to launch a new phase by making a qualitative leap in Sultanate’s development process. On Thursday, the Ministry announced a set of incentives to be offered to citizens and the private sector during 2021. The incentives include loans from Oman Housing Bank, with the annual sum designated for annual borrowing during 2021 to be increased, which will bring the total approvals for citizens’ loans to 2,250 from 1,350. The step will reduce the waiting period for citizens to obtain loans.

from Asharq AL-awsat https://english.aawsat.com/home/article/2717041/oman-announces-2021-budget-28-bn-expenditures