Business community lauds 2023 Budget

Members of Oman’s business community have lauded the 2023 budget, calling it a budget ‘based on a prudent study’.

They expressed their hopes for stronger economic growth, citing the recent upgrade by S&P Global of Oman's credit rating to BB, from BB-, based on improvements in the country's fiscal performance and reduced public debt.

Speaking to the Observer, Davis Kallukaran, Managing Partner of Crowe Oman said that the recovery witnessed in the Omani economy, lowering debt-to-GDP ratio, and focusing on investment spending are all promising and commendable at the face of a tumultuous year gone by which has been a year of transitioning towards stronger growth for Oman.

“The proposed budget deficit of 3 per cent of GDP is quite commendable considering the fact that Oman’s key focus has been debt management, which saw public debt reduced from RO 20.8 billion to RO 17.7 billion by the end of 2022 and the economy ended up with a surplus of RO 1.146 billion against the estimated budget deficit of RO 1.5 billion. The introduction of the VAT has positively contributed to revenues. This talks volumes on the prudent measures taken by the Government coupled with the increase in oil prices,” said Davis, who is also a Founder Director of Indo Gulf Middle East Chamber of Commerce.

The Tenth Five-year Development Plan 2021-25 aims at strengthening the social protection system to protect low-income earners by maintaining the level of spending on basic services such as education, health, housing and social security and welfare. The plan also emphasises on strengthening sustainable human development and safeguarding human capital to enhance the competitiveness of Omani youth in the local and global markets by equipping them for the job market.

“As high as 38 per cent of the public spending amounting to RO 4.3 billion is towards social and basic sectors and it is quite a remarkable move with 44 per cent of this going to the education sector and 22 per cent each to social security welfare and health sector and the remaining 12 per cent going to the housing sector. The government continues to press forward with a broad array of structural reforms under Oman Vision 2040, with the goal to achieve the sustainable private sector-led growth needed to offer opportunities to job seekers and ensure higher living standards for future generations,” adds Kallukaran.

For Abdul Latheef Uppala, the newly elected member of the Board of Director of the Oman Chamber of Commerce and Industry (OCCI), the revenues in last year budget was boosted by the higher oil prices to 14.234 billion rials, and was based on a forecast price of $50 per barrel but the fact that the government now estimates the average price in 2022 to be $55 is a good sign.

“What is soothing news to the business community in Oman is that the 2023 budget sees revenues of RO 10.05 billion, which is 5 per cent lower than 2022, and expenditures of RO 11.35 billion, 6.4 per cent lower than the previous year. Another reason for joy for the business communities is that there wouldn’t be any personal income tax introduced in 2023 and no increase in the rate of VAT which gives a great relief to the Omani citizens,” said Abdul Latheef.