Oman unveils budget with more optimistic forecast for 2018

Oman has been hit hard by a staggering drop in oil prices since mid-2014 and has agreed with other energy-rich states to cut production.

This strategy has had some success with oil prices rising and Oman projecting a reduced deficit in 2018.

Revenues over the year are estimated at $24.7 billion, up just three percent on last year, with projected oil prices of $50 a barrel. 

Spending is projected to rise to $32.5 billion, seven percent higher than 2017, which means the budget is expected to remain around the same as last year.

Omani media have praised the budget - which was approved by Sultan Qaboos bin Said on Monday - saying the increased revenues is a sign that the country's economy is recovering from the 2014 oil shock.

Higher oil prices of $65 a barrel also mean that the country might bring in more revenues than expected.

Income from crude oil accounts for around 70 percent of the sultanate's revenues, the finance ministry said in a statement.

The higher than expected deficit is due to production cuts agreed between OPEC and non-OPEC members.

Oman has unveiled a raft of austerity measures, issued bonds and borrowed heavily. Plans to introduce value added tax at the start of 2018 have been delayed for a year.

Omanis benefit from free public healthcare, education and other benefits, but the government is trying to shrink its bloated public sector which has been a traditional employer of nationals.

Credit ratings agencies have a less optimistic view of Oman's economy in the near future with the sultanate's rating downgraded last year.