MAY 28, 2023
Ministry of Finance unveils its fiscal performance in 2022
MUSCAT: The Ministry of Finance has published a report revealing the actual performance of the Budget 2022.
The report highlights a surge in public revenue and expenditure, driven by a remarkable increase in oil production and prices, which sets the stage for potential growth opportunities.
The report unveils a boost in oil prices during 2022, surpassing expectations and resulting in a surge in revenue. The average oil price touched $94 per barrel, an increase of $44 from $50 which was projected in the budget.
This uptick can be attributed to favorable global oil market conditions, reflecting an optimistic outlook for the energy sector. Daily oil production exceeded the targeted amount, reaching 1,060 thousand barrels, further bolstering the revenue stream.
Public spending demonstrates growth and allocations
Public spending saw an increase of 10 percent compared to the approved budget, indicating a commitment to developmental initiatives and economic stability.
The report reveals that current expenditure remained stable at RO 10,092 million, while development expenditure increased to RO 1,306 million. This surge in development expenditure indicates a focused approach to investing in infrastructure, innovation, and sustainable growth. Furthermore, contributions and other expenses experienced an upward trend, amounting to RO 1,931 million, which highlights the government's dedication to covering essential expenses and driving public welfare.
The Ministry of Finance report showcased an impressive 37 percent increase in public revenue compared to the approved budget.
This surge can be attributed to diverse revenue sources, including tax revenue, government investment returns, service fees, and capital repayments.
Hydrocarbon revenue took the lead, constituting a significant 77 percent of the total revenue. Net oil revenue witnessed an exceptional 70 percent increase, reaching RO 7,625 million, while gas revenue rose by 29 percent to RO 3,548 million.
Though representing 23 percent of the total revenue, non-hydrocarbon revenue experienced a slight 2 percent decrease, amounting to RO 3,300 million. This highlights the need for diversification efforts to reduce dependence on hydrocarbon resources and stimulate non-oil sectors for sustainable growth.
The report provides a comparative analysis of financial performance between 2021 and 2022, revealing significant improvements. Revenue surged from RO 11,195 million in 2021 to RO 14,473 million in 2022, showcasing a substantial 29 percent increase. Concurrently, spending rose from RO 12,418 million to RO 13,329 million, reflecting a 7.3 percent increase.
These figures indicate a promising fiscal performance and underscore the government's commitment to maintaining a balanced budget.
The Ministry of Finance report demonstrates the positive economic trajectory of the country, driven by surging oil prices and production. The revenue surge provides an opportunity for increased public investments in key sectors, fostering economic growth, job creation, and overall prosperity. However, efforts to diversify revenue sources and reduce reliance on hydrocarbon income remain crucial for long-term sustainability.
These findings set the stage for businesses and investors to explore potential growth opportunities and make informed decisions. As the economy continues to thrive, it is essential to monitor fiscal management and ensure the prudent allocation of resources to maximize the positive impact on the country's economic landscape.
Overall, the Ministry of Finance report showcases a promising fiscal performance in 2022.