Oman's Revenues Drop 31% on Pandemic, Oil Prices

The budget deficit of Oman reached 751.4 billion riyals ($ 1.96 billion) in the first quarter of this year, with public revenues declining by 30.5% due to the corona pandemic and the decline in oil prices.

The Omani Ministry of Finance said on Sunday that net oil revenues fell by 34.2% year-on-year in the first quarter of 2021.

This Gulf oil-producing country has been suffering in recent years from a decline in its revenues, in light of the accumulation of debt, which it resorted to to mitigate the impact of falling oil revenues, and amid delays in implementing reforms aimed at persifying the economy's resources.

Public spending fell 2.7% in in Q1 of 2021, year-on-year, partly due to efforts to contain costs in various government units, according to the Ministry of Finance.

In a precedent for a Gulf oil country, the Sultanate of Oman intends to enact an income tax to be paid by high-income earners from next year, as part of plans to reduce the deficit.

Credit Ratings Agency "Standard & Poor's" confirmed last month that Oman is below the degree worthy of investment, and said that its outlook is stable in light of expectations of easing financial pressures this year.