Oman’s budget surplus contracted to $1.7bn or 3% of GDP in the first half of 2023. Lower oil prices and production cuts have suppressed revenue. Nonetheless, Oman continued to pay down its debt, with circa $250m repaid in June, taking total debt repayments to $4bn for the first half of the year. Oman’s total debt stands at around 40% of GDP with a stated policy of reducing debt to around 30% of GDP.
The other main factor narrowing the budget surplus was higher spending in the non-oil sector, with civil ministry spending up 11% in the year to May. However, non-oil budget income rose strongly in the first half of the year. In particular, income tax was up almost 50% in the year to May, suggesting that corporate profitability has made a comeback after the lean Covid years. The latest data for June was released last week. Oil revenue was down with cuts to production and softer oil prices and spending was lower compared with last year due to electricity subsidies being paid last month while last year they were paid in June.
