Oman Finance Minister Signals Spending Restraint

Pressure for Oman to keep increasing its state spending every year is decreasing because the country has finished building most of the infrastructure it needs, finance minister Darwish al-Balushi said on Tuesday.

Speaking to reporters at a meeting of Arab finance ministers and central bank governors in Dubai, he said that in contrast to last year, Oman did not expect this year to spend more than it had originally budgeted.

“As far as the budget is concerned, we have in this year’s budget taken all the anticipated expenditure to sustain the expected growth. We do see any unexpected expenditure to occur during the year,” he said.

Asked whether it was sustainable for Oman to continue raising its spending over the medium term, he replied: “Not necessarily. It depends how oil prices will behave and also our level of production.

“However, we think that most of our infrastructure has been completed, therefore we do not have pressure on increasing expenditure.”

Balushi also said his government did not now plan to issue conventional bonds or sukuk this year.

Oman’s central bank chief Hamood Sangour al-Zadjali had said last month that the government was likely to issue its first sukuk, denominated in rials, towards the end of 2013 or at the start of next year.