Oman plans to boost budget spending by 26 percent in its five-year plan, which ends in 2015, to create jobs and improve living standards in the country, its finance minister said on Sunday.
The sultanate, which was hit by protests demanding jobs and an end to corruption last year, has planned to spend 43 billion rials ($112 billion) over five years. However, Finance Minister Darwish al-Balushi told Reuters that the government has now decided to increase the planned amount to 54 billion rials to cover “additional obligations”.
“It is the government’s response to the social requirements such as providing jobs, social security and unemployment benefits,” Balushi said.
Oman’s five-year spending plans are usually evenly distributed, but it is not specified how much money will be injected into its oil-reliant economy each year. He did not say how the 2012 budget would be affected by the increase.
A finance ministry official, who did not want to be named, told Reuters the ministry was targeting an average budget growth of 7 percent a year in the next four years to 2015. He declined to provide yearly plans, saying those would depend on oil production and prices.
Sultan Qaboos bin Said promised $2.6 billion in additional spending in April and announced plans to create 50,000 new jobs to defuse social tensions.
In September, Balushi told Reuters government spending should rise to 9.2 billion rials in 2011 from the initially planned 8.1 billion following the social measures.
In November, the consultative Shura Council approved the 2012 budget draft, estimating expenditures of 10 billion rials and revenue of 8.8 billion. State news agency ONA said earlier this month that Sultan Qaboos had signed the budget.
Oman forecast a fiscal deficit of 5.4 percent of 2010 gross domestic product in its 2012 budget, according to Reuters calculations based on an average oil price of $75 a barrel.
Its wealthier Gulf Arab neighbours pledged in March to provide $10 billion in aid over 10 years to help the country address its social challenges. Government officials have said the first tranche was expected to arrive this year.
Analysts polled by Reuters in December expected the non-Opec oil producer to post a fiscal surplus of 4.7 percent of GDP in 2012, after an estimated 6.7 percent in 2011, thanks to robust crude prices. The government said in December it created 35,000 jobs in 2011 and pledged another 35,000 jobs for this year.
Analysts said Oman, whose debt to GDP is forecast by the IMF to be the lowest in the Gulf at 3.2 percent this year, will have no problem to meet the extra financial demands due to strong oil prices and higher crude production.