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Muscat: Oman will slow down development projects to curb inflation, Minister of National Economy and supervisor of the Ministry of Finance, Ahmad Bin Abdul Nabi Makki, said while releasing details of Oman's deficit budget for 2008 yesterday.
Oman's general revenues for 2008 were estimated at 5.4 billion Omani riyals (Dh54 billion) against 4.49 billion riyals in the 2007 budget.
Oil revenues were estimated on the basis of an average price of $45 per barrel and crude production of 790,000 barrels per day.
Expenses
Expenditures in financial year 2008 are estimated at 5.8 billion riyals against 4.89 billion riyals in 2007.
Citing a spate of development projects as one of the causes of rising prices, Makki said that the government had decided to slow down the construction process.
"We now tender projects after every 15 days instead of the usual practice of tendering them every week," he said.
The emphasis on training and educating the large majority of young Omani nationals is evident in the 2008 budget proposal, approved by Sultan Qaboos Bin Saeed.
In the budget, Makki has set aside 36.9 per cent for education from the allocation of 1.92 billion riyals for civil services, ministries and public service organisations.
The budget has allotted funds for the Research Council, diplomatic institutes and the Ministry of Manpower to provide technical training for prospective jobseekers and other educational purposes.
The defence budget has been increased slightly to 1.36 billion riyals from 1.23 billion riyals in the 2007 budget.
In light of the revenue and expenditure estimates in the general budget, the estimated deficit for 2008, based on an average estimated crude oil price of $45, amounts to about 400 million riyals, which is seven per cent of revenues and three per cent of gross domestic product (GDP), similar to the estimated deficit in the 2007 budget.
However, the deficit as a percentage of total revenues decreased to seven per cent from nine per cent in 2007.
"This is considered relatively low as a percentage of revenues or domestic product.
"It is also considered among the economically reasonable and acceptable rates," Makki pointed out in his budget speech.
However, he said that the deficit could be covered by withdrawals from the contingency reserves allocation if no excess over the budget-estimated revenues is realised.
One of the positive indicators in this year's budget, he feels, "is the decline in the deficit as a percentage of total revenues and of domestic product."
Commitment
He also said that the 2008 budget reflected the government's commitment to building a modern national economy with renewable competitive capabilities that can match the rapid transformations taking place in the international arena.
Makki also reaffirmed the government's determination to promote privatisation in the country and said that the process is continuing.
Asked whether more funds would be injected into Oman Air as the national airline embarks on ambitious expansion, Makki said: "We are committed to injecting funds into Oman Air's development plans as and when the need arises."
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