MUSCAT -- The Sultanate's total revenue amounted to a massive RO 3.456 billion at the end of first quarter 2013. This is against RO 3.091 billion in the same period last year. According to figures available from the National Centre for Statistics and Information, Ministry of Finance, the year-to-date budget surplus reached RO 931 million, a 17 per cent drop from RO 1.121 billion last year. The surplus is equivalent to 3.1 per cent of Oman's 2012 gross domestic product.
The drop in the surplus is the result of increased public spending, which outpaced revenue, analysts say. Total public expenditure up to March this year stood at RO 2.525 billion against RO 1.970 billion in the corresponding period last year. At the same time, net oil revenue reached RO 2.714 billion with a production expenditure of RO 190.9 million and revenue from gas amounted to RO 370 million. Corporate income tax contributed RO 137.7 million while RO 5.2 million was from capital revenue.
Other revenues amounted to RO 229.6 million. Oman based its 2013 budget on a projected oil price of $85 per barrel with an expected expenditure of RO 12.9 billion and a deficit of RO 1.7 billion. The state's public revenue for 2013 is estimated to be about RO 11.16 billion compared to RO 8.8 billion in the 2012 budget, growth rate of 27 per cent. The budgeted expenditure is estimated to be RO 12.9 billion in 2013 compared to RO 10 billion in the 2012 Budget, an increase of 29 per cent.
The deficit is estimated at RO 1.7 billion in 2013 from RO 1.2 billion in 2012, which implies a deficit at 15 per cent of revenue, the highest of the last five year budgets. At the same time, the budget aims to grow its GDP growth at 7 per cent and non oil GDP at 10.6 per cent, while limiting inflation at 3 per cent for 2013. The budget has unravelled most of the concerns and focus on core GDP growth despite an array of events which affected the global and regional economy over the last two years. While the planned spending in 2013 gives cushion to some of the sectors in the non-oil sector space, which makes its diversification path more clear to achieving the government's Vision 2020.
As of 2012, Oman's actual oil alone accounted to 75 per cent of the total revenue, while gas accounted to 11 per cent and non-oil sector accounts for the rest. "Historically Oman had an average variance of RO 1.2 to RO 1.5 billion in revenue during 2004-11. However, the last two years had generated revenue in excess of RO 5.2 billion upon elevated oil prices. The excess has been primarily generated from oil based revenues to the tune of 4.6 billion, while gas based and non-oil revenues have been in the range of RO 700 million", point out analysts at United Securities.
Unlike the previous years, the only thing that is not seen in 2013 is large overspending given the higher fiscal break even, unless the country fetches very high prices for its oil. Usually the government tends to overspend around 10 to15 per cent of the budgeted amount on infrastructure projects.
© Oman Daily Observer 2013
