Oman's social security recipients receive biggest budget boost in six years

Sultan Haitham approves 2023 spending plan that forecasts a deficit fall and reduction in spending

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Oman’s social security recipients will receive their biggest boost in six years in the 2023 fiscal budget.

Sultan Haitham approved 11.35 billion rials ($28.34 billion) in spending for 2023, down 6.4 per cent from last year. The projected revenue of 10.05 billion rials is estimated to be 5 per cent less than in 2022.

Oman predicts that its budget deficit for this year will fall to 1.3 billion rials, from 1.55 billion rials in 2022.

But the main highlight for 2023 is the money allocated to social security, which rose by 22 per cent since 2017 to 946 million rials.

Social security recipients welcomed the increase.

“We are delighted, very delighted that our social security payouts will increase,” said Fatma Al Shamsi, 74, a resident of Muscat.

“As a widow living alone, my social security is about 105 rials a month and it has not increased with inflation for some years.”

Ms Shamsi expects her income monthly income to be about 130 rials now.

While there is no projected increase in fiscal spending this year, experts said the planned spending cut will affect low earners.

However, the budget is prudent, outlining spending cuts in other areas of the economy to benefit those who need the money the most, said Mohammed Al Farsi, a retired financial management lecturer formerly with the Sultan Qaboos University.

“The increase in social security budget will help the social security recipients [to keep pace] with the market inflation,” he said.

The Gulf state has more than 65,000 people on social security, including widows, orphans, people with disabilities or those who lost their jobs.

Buoyed by higher crude prices last year, Oman achieved a budget surplus of 1.14 billion rials in 2022 when the average price of oil was $94 a barrel, almost double the budgeted oil price of $50 a barrel.

Oman has set its 2023 budget based on an oil average price of $55 a barrel.

International oil prices are currently at about $82 a barrel as energy demand in Europe stays high due to the onset of winter.

The 2023 budget revealed a total current debt of 17.7 billion rials at the end of 2022, down from 20.8 billion rials at the end of 2021.

The sultanate, according to the 2023 budget estimate, will borrow 1.2 billion rials this year.

Updated: January 02, 2023, 5:03 AM
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