Oman posts budget surplus thanks to high oil revenues

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An Omani banknote with Sultan Qaboos bin Said's image. Photo - Alrroya.com

Oman posted a 1.5 billion rial ($3.8 billion) budget surplus for the Jan-Apr period of this year thanks to a surge in oil revenues. Inflation also dropped to 3% in April, the Gulf country’s economy ministry data showed on Wednesday.

The latest surplus of 5.3% surprised many analysts who were expecting a fiscal surplus of 5% of nominal gross domestic product (GDP) in 2012.

Revenues from crude oil account for 76% of Oman’s national income. The surplus was posted before crude prices plunged by more than $30 since the end of March, currently hovering around $90-95 per barrel.

Net oil revenues surged 35% in January-April from a year earlier to 3.3 billion rials ($8.57bn). Oman sold its oil at an average price of $109.1 per barrel, compared to $88.4 in the first three months of 2011.

In the wake of the Arab Spring, similar to other countries in the Gulf, Oman also took various measures to stimulate the economy and create more jobs.

Oman’s wealthier Gulf neighbours pledged $10 billion in aid over the next 10 years. Economic forecasts suggest a budget deficit of 1.2 billion rials ($3.12bn) for 2012, or 4.3% of 2011 GDP. The projected oil price is $75 per barrel.

The Gulf Arab sultanate’s revenue jumped by nearly 40% year-on-year in January-April to 4.6 billion rials ($11.94bn).

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