Oman records $2.6bn budget surplus in first eight months of 2022

Sultanate's revenue in January-August period climbed 47.3% to $24.1bn

Oman is poised to post its first yearly fiscal surplus in a decade in 2022, according to a Fitch Solutions. Alamy
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Oman recorded a budget surplus of 1.09 billion rials ($2.6 billion) in the first eight months of this year, compared with more than 1bn rial deficit in the same period a year earlier.

The Gulf country's total public revenue in the January-August period jumped 47.3 per cent to more than 9.3bn rials, compared with 6.3bn rials during the same period last year.

Total public spending until the end of August this year increased by 11.5 per cent to reach about 8.2bn rials, compared with 7.3bn rials in the prior year period.

Oman is poised to post its first yearly fiscal surplus in a decade in 2022, according to a Fitch Solutions report released in August.

The sultanate's 12-month fiscal surplus is expected to amount to 6.5 per cent of its total gross domestic product this year, Fitch estimates. Revenue will rise further in the second half of the year because of high energy prices, it said.

Oil prices, which rose more than 67 per cent in 2021, continue to trade higher this year amid supply concerns following Russia’s military offensive in Ukraine.

Sultan Haitham, Ruler of Oman, earlier this year said that the country planned to use revenue from rising oil prices to reduce its public debt and support spending on government projects while ensuring inflation does not affect basic commodity prices.

Oman, a small crude producer compared with its Gulf neighbours, is more sensitive to oil-price swings and was hit hard by the coronavirus pandemic.

However, higher oil prices, along with fiscal reforms, helped to narrow the government deficit.

In April, S&P Global Ratings upgraded Oman’s long-term foreign and local currency sovereign credit rating to BB- from B+, citing higher oil prices, rising hydrocarbon production and the government’s fiscal reform programme.

A BB rating is a speculative grading that implies the issuer is less vulnerable in the near term.

The credit rating agency also revised Oman's outlook to stable.

Oman's economy is forecast to grow 5.6 per cent this year amid higher oil prices, the International Monetary Fund earlier said.

Updated: October 12, 2022, 6:22 PM