2 Minute Read by Reuters Staff Reuters, DUBAI, July 1 – Oman’s year-to-date budget deficit was 890.2 million rials ($2.32 billion) in May, according to the ministry of finance, as low oil prices and decreasing crude output placed pressure on the small Gulf producer’s finances. Oman is one of the poorest countries in the oil-rich area monetarily, making it more exposed to price changes in hydrocarbons, which accounted for nearly a third of its GDP in 2019. Oil income fell by 23% in the first five months of this year compared to the same time in 2020, according to the ministry. Total revenue, including non-oil revenue, was down 19%. Oman has cut public spending to minimize its budget deficit, although the rate of adjustment is slower than the revenue decline. “As budget consolidation continues, public spending continues to drop,” the ministry warned. In the year to May, spending was down 2.9 percent on an annual basis. The first quarter’s GDP was down 2.5 percent at current prices, owing to a 20.6 percent drop in oil activity, while the non-oil sector grew by 5.7 percent, according to the ministry. In October of last year, Oman announced a medium-term fiscal strategy, which comforted investors and enabled the sultanate raise billions of dollars in loans and bonds this year. It raised $1.75 billion in sukuk, or Islamic bonds, last month, and received almost $11.5 billion in demand. 0.3840 Omani rials ($1 = 0.3840 Omani rials) (Davide Barbuscia contributed reporting, and Giles Elgood edited the piece.)/n
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