An Omani government financial planning officer said on Thursday the government intends to increase its 2013 budget spending by 10% compared to this year’s plan to fund new infrastructure projects.
“A 10% hike in spending will take care of our growth to fund development projects such as airports, ports, roads, hospitals and in the energy sector,” said the source, told Reuters on condition of anonymity.
Basing the 2013 budget plan on an oil price of $85, the government official said the deficit would be assumed about the same size as the shortfall originally projected for this year.
Based on an assumed oil price of $75 per barrel, Oman earmarked an expenditure of 10 billion rials ($26 billion) for 2012 with a deficit forecast at 1.2 billion rials.
Analysts believe high oil prices which are currently hovering over $110 per barrel will help Oman post a massive surplus this year. The non-OPEC oil exporter is expected to post a budget surplus of 8.1% of its economic output in 2012, analysts polled by Reuters told in this week’s forecast.
According to Reuters data, Oman, which depends on crude oil for 77% of the budget income, posted a budget surplus of 2 billion rials ($5.2bn) in January-July while selling its oil for $113 per barrel on average in that period.
According to the IMF, Oman’s budget break-even oil price would be $81 per barrel this year and is expected to rise to $105 by 2016.
Muscat, rocked by protests against unemployment and corruption last year, is trying to create tens of thousands of new jobs every year for its rapidly-growing population.