Oman reduced its forecast fiscal deficit by nearly 84 per cent in 2009 as the Gulf country spent less than the 2008 record expenditure and revenues were much higher than had been expected, official data showed.
Oman, which is not an Opec member, had forecast 2009 spending at a record RO6.4 million (Dh61.6 billion) compared with a budgeted expenditure of RO5.8bn in 2008.
Revenues were also estimated higher at RO5.614m in 2009 against RO5.4bn in 2008. The increase in spending nearly doubled the forecast gap to RO810m in 2009 from RO410m in 2008.
But figures released yesterday by the Ministry of National Economy showed the actual deficit last year stood at only around RO128.3m.
It was around 84 per cent below the projected 2009 shortfall but in contrast with the RO78.4m actual surplus recorded in 2008. The decline last year was a result of a sharp increase in public revenue to nearly RO6.68bn compared with budget forecasts, while actual spending remained far below the 2009 target, standing at about RO6.79bn, the Ministry said in its March economic bulletin. The figures showed Oman's oil revenues dipped by around 11.8 per cent to RO4.49bn through 2009 from about RO5.09bn in 2008 as a result of the decline in crude prices.
The country's gas revenues also dived by around 20.8 per cent to RO721m from RO909.9m, while there was a surge of 55.1 per cent in corporate income tax revenue and a plunge of 15.2 per cent in capital revenues.
Other earnings dipped by 15.2 per cent. A revenue breakdown showed investment grew by around 3.8 per cent to RO2.36bn in 2009 from RO2.28bn in 2008 following a government pledge to join other Gulf oil producers in expanding capital spending to cushion the impact of the global financial turmoil. After adding the surpluses from the budgets of the previous two years, there was a "remaining surplus" in the 2009 fiscal year of around RO157.4m, according to the Ministry of Economy. The figures showed Oman, which controls around five billion barrels in proven oil resources, was close to its crude output target in 2009 as production increased to nearly 810,000 bpd from about 755,000 bpd in 2008.
Despite the surge, the country's oil sector plunged by 38 per cent in 2009 because of a sharp fall in prices.
This depressed the overall nominal gross domestic product (GDP) by 27.4 per cent to RO17.731bn last year from RO23.185bn in 2008.
A breakdown showed most sectors recorded a decline in current prices, with non-oil GDP shrinking by nearly 7.3 per cent.
But in real terms, the country's GDP grew by around 3.7 per cent through 2009 mainly due to higher crude output and expansion in non-oil sectors. The 2010 budget, which was announced early this year, is based on a more optimistic oil price of $50 a barrel compared with $45 in 2009. Spending was projected at a record RO7,180m, nearly nine per cent above the 2009 budget, while revenues were assumed at RO6,380m, leaving a deficit of RO800m.