Oman spending to rise to $24 bln in 2011 – Fin Min
Spending seen slightly above fin min expectation in June; Oman comfortable with crude prices above $80 per barrel; Reiterates 5 pct GDP growth forecast for 2011
September 7, 2011 10:40 by Reuters
Oman’s government spending should rise to 9.2 billion rials ($23.9 billion) this year, slightly higher than expected, but the Gulf Arab oil exporter will be comfortable if Brent crude stays above $80 per barrel, its finance minister said on Tuesday.
The small non-OPEC oil producer has been hit by protests demanding jobs, higher salaries and an end to graft this year as unrest spread through the Arab world, making it boost expenditure well above the original plan.
“Now, it is 9.2 billion rials,” Darwish al-Balushi told Reuters about government spending in 2011, speaking ahead of a Wednesday meeting of Arab finance ministers in the capital of the United Arab Emirates.
“We are looking at the oil price and we hope it will stay at a decent level. We have seen a decline in the oil price but as long as it stays above $80 (per barrel) we will be alright,” he said.
In December, Oman projected record expenditure of 8.1 billion rials in its 2011 budget, up 13.2 percent from the previous year.
However, protests prompted Sultan Qaboos bin Said, a U.S. ally who has ruled Oman for 40 years, to promise a $2.6 billion spending package in April. He also announced plans to create 50,000 new jobs among other measures.
In June, Balushi said the budget spending was expected to rise to 9 billion rials this year. He did not say on Tuesday how exactly the sultanate’s 2012 budget would look like but hinted there may be another spending rise.
“We will have requirements here and there, but maybe another 10 percent on the spending side,” Balushi said.
A ministry official told Reuters in August that Oman planned to increase government spending by 9 percent in 2012 from this year to finance construction projects and create more jobs for nationals.
Brent crude prices have been hovering between $92 and $127 per barrel since the beginning of the year .
Balushi also reiterated his June comments that Oman’s economy should grow by around 5 percent this year, above analysts’ forecast of 4.1 percent .
“We are expecting economic growth of about five percent this year,” he said. “Inflation forecast is about 4 percent, it is a little bit on the high side but I would say it’s controllable and the government is watching closely.”
Oman’s inflation edged down in June from a two-year high to 4 percent, matching analysts’ full year forecast and touching the lower end of the central bank’s 2011 prediction of 4-5 percent. ($1 = 0.385 Omani rials) (By Martina Fuchs; Writing by Martin Dokoupil; Editing by Firouz Sedarat)