Oman posts $3bn budget surplus in the first 10 months of 2022 on higher oil revenue

Oman posted a budget surplus of more than 1.2 billion rials ($3.11 billion) in the first 10 months of 2022, compared with a deficit of about 1 billion rials in the same period a year ago, driven by higher oil revenue.

The Gulf country's total public revenue from January to October surged more than 42 per cent to about 11.86 billion rials, up from 8.33 billion rials a year earlier, according to preliminary data from the Ministry of Finance. Total public spending during the same period increased by 14 per cent to 10.65 billion rials ($27.66 billion).

The sultanate surpassed last year's total of 8.4 billion rials when public spending hit 9.4 billion rials at the end of September, after coming close to matching it in August.

Development expenditure rose 10 per cent annually to 765 million rials, which represents 70 per cent of the 1.1 billion rials allocated for total developmental spending.

Oman is poised to post its first yearly fiscal surplus in a decade this year, a Fitch Solutions report released in August showed.

The sultanate's 12-month fiscal surplus is expected to amount to 6.5 per cent of its total gross domestic product while revenue is expected to rise further in the second half of the year because of high energy prices, it said.

In November, S&P Global Ratings upgraded Oman’s credit ratings from “BB-” to “BB” with a stable outlook, with the agency indicating that the “significant improvement” in Oman’s fiscal performance and balance of payments positions was driven by continuing fiscal consolidations and higher oil prices.

Hydrocarbon revenue at the end of October by increased more than half to 9.24 billion riyals, compared with 6.14 billion riyals in the same period in 2021.

“Such increase is supported by higher average oil price of $95 per barrel, as well as an increase in oil crude production to 1.056 million barrels per day,” the ministry said.

Net oil revenue in the first 10 months of 2022 jumped about 40 percent to 6.19 billion rials while gas revenue surged about 80 percent to 3.05 billion rials.

Brent, the benchmark for two thirds of the world's oil, is expected to average $92 a barrel in 2023, according to the latest estimates from the US Energy Information Administration. That is now $3 less than its previous forecast last month.

The International Monetary Fund predicts that Oman’s real GDP will grow to 4.4 percent and 4.1 percent in 2022 and 2023, respectively, from 3 percent in 2021.