Oman slows spending growth in 2019 budget

DUBAI, Jan 01 (Reuters): Oman's government released a 2019 state budget on Tuesday that slows spending growth but may not cut a big deficit that has caused international rating agencies to downgrade its debt to junk status.

Spending this year is projected at 12.9 billion rials ($33.5 billion), up from 12.5 billion rials in the original budget for 2018.

That implies spending growth of about 3.0 per cent, compared to nearly 7.0 per cent in the 2018 budget.

Revenues are estimated at 10.1 billion rials, assuming an average oil price of $58 per barrel this year; that would leave a 2019 budget deficit of 2.8 billion rials, or 9.0 per cent of gross domestic product.

But Brent oil is currently around $54, so unless oil prices rise, Oman may find it hard to hit the deficit estimate.

In the first 10 months of 2018, when the Brent price was much higher and averaged $74, the government ran a deficit of 2.04 billion rials, according to the latest data from the statistics agency.

The government said it would finance 86 per cent of this year's deficit through local and foreign borrowing.