Oman posted a budget surplus of 1.5 billion rials ($3.8 billion) in the first four months of this year helped by surging oil revenues, while inflation dipped to a two-year low of 3 per cent in April, economy ministry data showed on Wednesday.
The budget surplus is equivalent to about 5.3 per cent of the sultanate’s 2011 nominal gross domestic product, according to a Reuters calculation.
Oman, which faces a challenge to create tens of thousands of jobs every year for its fast-growing population, has raised its budget by 23 per cent to 10 billion rials this year compared to its original projection for 2011.
In January-April the Gulf Arab sultanate’s revenue jumped by nearly 40 per cent year-on-year to 4.6 billion rials, or 52 per cent of the initial full-year projection, the data showed.
Spending increased by 26 per cent from a year earlier.
Public finances have improved markedly compared to a year ago when the government posted a 114 million rial deficit for January to April.
Analysts polled by Reuters in March expected the non-OPEC oil producer to post a fiscal surplus of 5.0 per cent of GDP in 2012, up from 3.5 per cent last year.
However, prices of crude oil, which accounts for 76 per cent of Oman’s budget income, have plunged by more than $30 since the end of March to around $95 per barrel.
The country would still post a surplus in 2012 if oil prices stay at current levels, as the International Monetary Fund projected in December that Oman’s budget break-even oil price would be $81. But that break-even level is expected to rise to $105 by 2016.
The country of 2.8 million people boosted spending last year following protests demanding more jobs and an end to corruption. Large scale strikes in Oman’s oil facilities in May were followed by political protests and the detention of about 30 people, including activists whose arrest sparked more protest.
Net oil revenues surged 35 per cent in January to April from a year earlier to 3.3 billion rials, Wednesday’s data showed. Oman sold its oil at an average price of $109.1 per barrel, up from $88.4 in the first three months of 2011.
Government spending soared 26 per cent to 3.1 billion rials in January-April, accounting for a third of the full-year plan.