FINANCIAL NEWS

Oman to start cutting state subsidies next year

26 Oct 2014

(MENAFN) The Omani Ministry for Financial Affairs said that Oman’s government is considering starting to cut some state subsidies next year due to the decline in global oil prices which might cause pressure on the country’s budget, Gulf Times reported.

Oman’s original 2014 budget plan predicted that state spending would reach USD35.1 billion, up 5 percent compared to the 2013 budget, which itself was up 29 percent compared to the budget of 2012.

Oman, which has been considering ways to reform its costly and sometimes wasteful subsidy system, said that spending in the 2015 budget plan would be around the same level as the 2014 budget or marginally higher and that until now there are no plans to cut spending on the big infrastructure projects which Oman is building to diversify its economy beyond oil.

‘There is no intention unless if the trend with the oil price continues declining downwards. It is not clear at the moment if oil prices will sustain and at which level. We do not want to come up with a policy response that will create nothing but more confusion for our programs. We want to do it gradually, in a steady manner,’ the Minister of Financial Affairs was quoted saying.

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