Oman posted a budget surplus of OMR768m ($2bn) in the first two months of 2012 thanks to rising oil prices that boosted revenue, data released by the finance ministry suggested on Sunday.
According to Reuters calculations, the surplus is equivalent to about 2.7% of the sultanate’s 2011 nominal gross domestic product. The country posted a surplus of OMR467m ($1.2 billion) in January.
Oman increased its budget by 23% to OMR10bn ($25.97bn) in 2012 with plans that include almost 96% of last year’s actual expenditure, boosted by extra spending following protests that took place in February last year demanding more jobs and an end to corruption.
Analysts polled by Reuters in March expected the non-OPEC oil producer to record a fiscal surplus of 5% of GDP this year due to high crude prices, up from 3.5% last year.
The Gulf sultanate’s budget income has risen by nearly 31% to 1.9 billion rials ($4.94bn) in January-February compared to the same period last year. The data provided by the finance ministry shows it accounts for 21% of the initial full-year projection.
The oil and gas ministry’s data showed Oman’s net oil revenues increased 43% to OMR1.5bn ($3.90bn) as it sold oil at an average price of $109.1 per barrel in January-March, up from $88.4 in the first three months of 2011.
It also gave rise to government spending which increased 8% to OMR1.1bn ($2.86bn) in January-February, accounting for 11% of the full-year plan.
The government initially set 2011 spending at 8.1 billion rials ($21.04bn) but social unrest prompted Sultan Qaboos bin Said, who has ruled Oman for 42 years, announced an extra spending of $2.6bn in April 2011.
Oman’s wealthy Gulf neighbours pledged an aid worth $10bn in March last year over 10 years as it struggles to cut down a budget deficit of OMR1.2bn ($3.12bn) for 2012, or 4.3% of GDP.
The International Monetary Fund projected in December last year that Oman’s budget break-even oil price, the minimum price which it needs to balance its budget, would rise to $105 by 2016 from $81 per barrel in 2012.