Analysis of Oman’s 2017 budget | KPMG | OM

Analysis of Oman’s 2017 budget

Analysis of Oman’s 2017 budget

On Sunday 1 January, Oman revealed its 2017 budget. Total projected spending is 11.7 billion Omani Rials 11.7 billion (RO11.7bn) and revenues estimated at RO8.7b, leaving an anticipated deficit of around RO3b, which is 12 percent of GDP and 43 percent lower than the actual deficit of RO5.3b for 2016 (based on initial final accounts). GDP is budgeted to grow by two percent.

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This year’s budget is based on an oil price of US$45/bbl, which is lower than the US$55/bbl assumed in the ninth five year plan and suggests prudent financial management.

In our latest outlook, we analyze the proposed measures in the budget as Oman seeks to grow its economy in a challenging economic environment.
 

Key highlights

  • 70 percent of government revenues come from oil and gas.
  • Expenditure is budgeted to be reduced by eight percent without curtailing development expenditure.
  • Allocations to education, health and social welfare remain unchanged at 23 percent.
  • The deficit is predominantly financed out of borrowings. Public debt has already doubled to RO7.4b or 29 percent of GDP, at the end of 2016 compared to 2015.
  • The government is focused on ensuring that its Tanfeedh and privatization programs succeed.

For more information, or to discuss what the budget means for your business, please feel free to contact me or any of our team members. 

 

Analysis of Oman’s ninth five year plan and 2016 budget

Analysis of Oman’s ninth five year plan and 2016 budget

The ninth five year plan (FYP9), covering 2016 to 2020, is the final component of Vision 2020.

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