Big push for social and physical infrastructure
Published: 06:01 PM,Jan 02,2025 | EDITED : 10:01 PM,Jan 02,2025
Sultan al Habsi, Minister of Finance, addressing the press on budget in Muscat on Thursday. — ONA
Muscat, Jan 2
Oman’s General Budget for the Fiscal Year 2025 underscores the government’s commitment to economic sustainability, fiscal prudence, and development in alignment with the financial framework of the Tenth Five-Year Development Plan (2021-2025) and Oman Vision 2040. As the final year of the Tenth Five-Year Plan, the 2025 budget is designed to maintain financial, economic and social stability while addressing global economic uncertainties. Below is a comprehensive analysis of the budget’s revenue, expenditure, deficit, sectoral priorities and key performance indicators.
Revenue Estimates:
The total public revenue for 2025 is estimated at RO 11.180 billion, reflecting a 1.5-per cent increase from 2024. This growth is driven by higher gas and non-hydrocarbon revenues. The budget assumes an average oil price of $60 per barrel and an average daily oil production of over 1 million barrels.
Revenue Breakdown:
1. Oil revenue: RO 5,830 million, accounting for 52 per cent of total revenue, though declining by 1.4 per cent from 2024 due to reduced production.
2. Gas revenue: RO 1,777 million, contributing 16 per cent to total revenue and growing by 12.8 per cent from 2024, thanks to increased domestic sales and higher prices.
3. Non-hydrocarbon revenue: RO 3,573 million, a 1.5-per cent increase, attributed to improved tax collection and economic recovery.
• VAT and excise taxes: RO 680 million.
• Corporate income tax: RO 656 million.
• Oman Investment Authority dividends: RO 800 million.
• Government service fees: RO 1,384 million.
4. Capital revenue and repayments: RO 53 million, a 18.5-per cent decline from 2024.
Expenditure Estimates:
The total public expenditure is set at RO 11.800 billion, marking a 1.3-per cent increase from 2024. The budget prioritises essential social services, development projects and public debt servicing.
Expenditure Breakdown:
1. Current expenditure: RO 8,555 million, constituting 72 per cent of total spending.
• Defence and security: RO 3,070 million, unchanged from 2024.
• Civil ministries: RO 4,570 million, a 2.6-per cent increase, reflecting staff promotions and settlement of private sector dues.
• Public debt service: RO 915 million, reduced by 12.8 per cent, owing to improved debt management.
2. Development expenditure: RO 900 million, with allocations for critical infrastructure, housing and employment initiatives.
3. Contributions and other expenses: RO 2,345 million, a 7.7-per cent increase, driven by higher subsidies and social protection allocations.
• Subsidies include:
• Electricity: RO 520 million.
• Water and sewage: RO 194 million.
• Food: RO 15 million.
• Fuel: RO 35 million.
• Social Protection: RO 577 million.
Budget Deficit and Financing Plan:
The 2025 budget deficit is projected at RO 620 million, representing 6 per cent of total revenue and 1.4 per cent of GDP. This is a 3.1-per cent reduction from the 2024 deficit estimate. The deficit will be financed through:
1. Net Borrowing: RO 220 million.
• External Borrowing: RO 1,304 million.
• Local Borrowing: RO 750 million.
2. Withdrawal from Reserves: RO 400 million.
Oman’s General Budget for the Fiscal Year 2025 underscores the government’s commitment to economic sustainability, fiscal prudence, and development in alignment with the financial framework of the Tenth Five-Year Development Plan (2021-2025) and Oman Vision 2040. As the final year of the Tenth Five-Year Plan, the 2025 budget is designed to maintain financial, economic and social stability while addressing global economic uncertainties. Below is a comprehensive analysis of the budget’s revenue, expenditure, deficit, sectoral priorities and key performance indicators.
Revenue Estimates:
The total public revenue for 2025 is estimated at RO 11.180 billion, reflecting a 1.5-per cent increase from 2024. This growth is driven by higher gas and non-hydrocarbon revenues. The budget assumes an average oil price of $60 per barrel and an average daily oil production of over 1 million barrels.
Revenue Breakdown:
1. Oil revenue: RO 5,830 million, accounting for 52 per cent of total revenue, though declining by 1.4 per cent from 2024 due to reduced production.
2. Gas revenue: RO 1,777 million, contributing 16 per cent to total revenue and growing by 12.8 per cent from 2024, thanks to increased domestic sales and higher prices.
3. Non-hydrocarbon revenue: RO 3,573 million, a 1.5-per cent increase, attributed to improved tax collection and economic recovery.
• VAT and excise taxes: RO 680 million.
• Corporate income tax: RO 656 million.
• Oman Investment Authority dividends: RO 800 million.
• Government service fees: RO 1,384 million.
4. Capital revenue and repayments: RO 53 million, a 18.5-per cent decline from 2024.
Expenditure Estimates:
The total public expenditure is set at RO 11.800 billion, marking a 1.3-per cent increase from 2024. The budget prioritises essential social services, development projects and public debt servicing.
Expenditure Breakdown:
1. Current expenditure: RO 8,555 million, constituting 72 per cent of total spending.
• Defence and security: RO 3,070 million, unchanged from 2024.
• Civil ministries: RO 4,570 million, a 2.6-per cent increase, reflecting staff promotions and settlement of private sector dues.
• Public debt service: RO 915 million, reduced by 12.8 per cent, owing to improved debt management.
2. Development expenditure: RO 900 million, with allocations for critical infrastructure, housing and employment initiatives.
3. Contributions and other expenses: RO 2,345 million, a 7.7-per cent increase, driven by higher subsidies and social protection allocations.
• Subsidies include:
• Electricity: RO 520 million.
• Water and sewage: RO 194 million.
• Food: RO 15 million.
• Fuel: RO 35 million.
• Social Protection: RO 577 million.
Budget Deficit and Financing Plan:
The 2025 budget deficit is projected at RO 620 million, representing 6 per cent of total revenue and 1.4 per cent of GDP. This is a 3.1-per cent reduction from the 2024 deficit estimate. The deficit will be financed through:
1. Net Borrowing: RO 220 million.
• External Borrowing: RO 1,304 million.
• Local Borrowing: RO 750 million.
2. Withdrawal from Reserves: RO 400 million.