The Ministry of Finance has revealed that initial total public revenues for State Budget 2023 are estimated to be about RO11.650 billion, up by 10 per cent over the approved budget for the year 2022.

The rise was due to an expected increase in the average rate of oil production to 1.175 million barrels per day, averaging US$55 per barrel.

During the first media meeting on the budget, the Finance Ministry said that total public spending was estimated at RO12.950 billion, up by 7 per cent over the approved spending in the 2022 budget.

It is estimated that Budget 2023 will have a deficit of RO1.3 billion, constituting 11 per cent of total revenues and 3 per cent of the gross domestic product (GDP).

Sultan Salim Al Habsi, the Minister of Finance, said that global economic and geopolitical developments were taken into consideration when drafting the general state Budget 2023.

He pointed out that Oman utilised the gains from excess oil prices to cut down the public debt. As a result, the public debt was slashed from 70 per cent in 2020 to 43 per cent in 2022, he explained.

The government will begin implementing a programme of fiscal sustainability and the development of the financial sector through the creation of initiatives and projects, Al Habsi affirmed.

He added that these initiatives and programmes will be conducted jointly with the Central Bank of Oman (CBO) and the Capital Market Authority (CMA) to bolster the role of the banking sector in funding and investment – which will serve the goals of the National Programme for Achieving Fiscal Balance.

The minister pointed out that Oman managed to keep inflation within safe boundaries not exceeding 3 per cent, thanks to a raft of policies designed to stem the impacts of the phenomenon.

He said that the total subsidy in 2022 stood at RO1.6 billion and that the income tax will not be applied in 2023.

Al Habsi said that the Ministry of Finance is embarking on restructuring Oman Development Bank (ODB) so that it could play a greater role in the volume of funding rendered to private sector companies and small and medium enterprises (SMEs).

Abdullah Salim Al Harthy, Undersecretary of the Ministry of Finance expected that the average oil price, according to estimates of the state’s general budget, would stand at US$94 by the end of 2022, bringing revenues to RO14.234 billion and spending to RO13.088 billion and thereby posting a financial surplus of RO1.146 billion.

Dr. Nasser Rashid Al Ma’awali, the Undersecretary of the Ministry of Economy, said that the total development expenditures, since the beginning of the 10th Five Year Plan (2021-2025) till the end of November 2022, stood at RO2.029 billion.

Al Ma’awli pointed out that estimates for the development budget in 2023 will stand at RO5.8 billion, of which RO5.3 billion will be earmarked for projects under execution and RO500 million for new projects.

His Excellency Qais Mohammed Al Yousef, the Minister of Commerce, Industry and Investment Promotion, affirmed that Oman provides a lucrative environment for the growth of businesses and investments. Thirty-five regulations were issued between 2020 and 2022 for the improvement of the business climate, he said.

H.E. Al Yousef pointed out that the Ministry of Commerce, Industry and Investment Promotion received more than 596,000 applications via the “Invest Easy” portal, since the launch of the service in April 2021. This is in addition to 765,324 licenses that were issued automatically.

In the same context, His Excellency Abdul Salam Mohammed Al Murshidi, the Chairman of Oman Investment Authority (OIA), said that the Authority intends to spend RO1.9 billion on investment projects during the year 2023.

These include the expansion and consolidation of existing projects and the completion of projects under implementation, as well as the endorsement of the start of new projects, he added.

H.E. Al Murshidi explained that funding for “investment spending” on these projects would be undertaken through partnership with the local and foreign private sectors, along with contributions from the OIA or its subsidiaries or from financing institutions with taking into consideration cutting down the total debts of the companies during the next five years.

He also added that the number of new and expansion projects slated for investment in 2023 will stand at 65, among which will include 19 investments in logistics, 5 in energy, 12 in communications and information technology, 5 in mining, 12 investments in services, and 12 investments in food and fisheries.

The Chairman also underscored the need to proceed with the Exit Plan announced by the OIA in 2022. The plan envisages exit from 8 investments in 2023, to be distributed as follows: 3 in the energy sector, 3 in the aviation, industry and tourism sectors, and 2 in the communications and information technology sector – thus generating returns exceeding RO500 million.

The meeting was attended by ministers, undersecretaries, and public and private sector officials.