The Ministry of Finance of Oman has announced the State’s General Budget for the 2025 fiscal year, with public spending projected at RO11.8 billion, marking a 1.3% increase over the 2024 estimate.

The 2025 budget underscores the government’s commitment to advancing the goals outlined in the 10th Five-Year Development Plan and Oman Vision 2040, aiming to achieve sustainable economic growth and social development.

Key Spending Allocations

Current expenditures are estimated at RO8.555 billion of the total public spending, representing 72 per cent of the total. Development and investment spending is projected to reach RO4.440 billion.

Revenue Projections

Total government revenues are expected to reach RO11.180 billion, reflecting a 1.5 per cent increase from 2024. These projections are based on an assumed oil price of US$60 per barrel and daily production of 1 million barrels. Oil and gas revenues are anticipated to contribute RO7.607 billion, while non-hydrocarbon revenues are forecast at RO3.573 billion.

Economic Outlook

Speaking at a press conference, His Excellency Sultan bin Salim al Habsi, Minister of Finance, stated that the 2025 budget will enhance financial sustainability and achieve a targeted real GDP growth of at least 3 per cent.

Approximately RO5 billion – 42 per cent of total public spending – has been allocated to social and basic sectors, with the breakdown as follows:

• 39 per cent for education
• 28 per cent for social security
• 24 per cent for healthcare

Additionally, RO557 million has been earmarked for social protection programmes, while RO1.14 billion is allocated to development projects expected to have a significant economic impact.

The budget also sets aside RO2.345 billion under the “contribution and other expenses” category, covering:

• RO577 million for social protection
• RO520 million for electricity subsidies
• RO194 million for water and sanitation
• RO35 million for fuel subsidies
• RO15 million for essential food item subsidies
• RO73 million for housing and development loan interest subsidies

H.E. Habsi emphasised that funding will support development programmes in governorates and foster job creation across both public and private sectors.

Key Development Projects for 2025

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Significant projects planned for 2025 include:

• Completion of 20 new government schools and tenders for 22 additional schools
• Completion of 9 government hospitals
• Expansion of the Muscat Expressway
• Construction of new ports and dams

Deficit and Debt Management

The budget forecasts a deficit of RO620 million, equivalent to 5.5 per cent of estimated revenues. Total financing requirements for 2025 are estimated at RO2.454 billion, encompassing the deficit and loan repayments. The deficit will be financed through:

• RO220 million in local and external borrowing
• RO400 million from reserves

Public debt repayments are projected at RO1.834 billion for 2025.

2024 Financial Performance

Preliminary results for 2024 reveal a surplus of RO540 million, reversing the initially forecasted deficit of RO640 million. Additional revenue from 2024 was allocated to enhance social spending and reduce public debt.

General revenues in 2024 rose by 15.1 per cent to RO12.674 billion, compared to the approved budget, while public spending amounted to RO12.134 billion. Public debt decreased from RO15.2 billion at the start of 2024 to RO14.4 billion by year-end, resulting in RO110 million in debt servicing savings. The debt-to-GDP ratio also dropped from 36.5% to 34% during the year.

A breakdown of Oman’s State General Budget for 2024: