“I expect the money to come soon. We are in the process of finalising talks and documentation. There was a delay due to summer holidays. This year, it is going to be $1 billion,” Darwish bin Ismail Al Balushi, minister responsible for financial affairs, told Times of Oman.
“However, this fund is not considered for budget estimate this year,” he added, while responding to a question from Times of Oman, on the sidelines of an inter-active ‘Ramadan evening’ organised by Oman Chamber of Commerce and Industry (OCCI), on Saturday.
Al Balushi said the country’s economy was expected to grow by 5 per cent this year, lower than the government’s earlier projection of 6 per cent. “This year, we expect the average oil price at $100 per barrel. This will keep us in a comfortable position. We are still in surplus….we will be able to cover all our expenditures,” he explained.
Higher salaries and other benefits for Omani workers, following the recent disturbances in the country, will incur an additional RO1 billion expenditure to the government this year. This will take this year’s total public expenditure to RO9.1 billon, from an earlier budget estimate of RO8.1 billion.
“However, if the oil price falls below $80 a barrel next year or in the medium term, the government will look at different options, including using (state general) reserves,” the minister added.
Referring to inflationary pressures, the minister said the inflation could be around 4 per cent this year. “Today, it is within that range. The government is closely monitoring the situation and will take necessary measures, if needed.”
Al Balushi said inflation is mainly driven by three factors – local demand, price rise in importing countries, and the value of dollar. “However, the most important reasons for the inflationary pressure are local demand, and price rise in countries from where Oman imports.”
Meanwhile, denying any move to de-peg the Omani rial from the US dollar, the minister said, “The world has confidence in the US dollar mainly because there is no other currency in the world that has the potential to take the place of the dollar. As far as we are concerned, some of our investments have lost their value due to the depreciating dollar. We think that it is a temporary phenomenon.”
