Oman Will Borrow to Plug Budget Deficit

Oman says it will need to borrow money from local and international markets as it announced its budget for 2017 with a projected deficit of around $7.7 billion, AFP reported. A finance ministry statement on Sunday said the sultanate, which like other oil-producing (Persian) Gulf Arab states (Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain) has been hit by a cash crunch because of a sharp drop in oil prices, will also follow a policy of austerity. It estimated the deficit will be three billion riyals ($7.79 billion) or 12% of the country’s gross domestic product. Oman will therefore seek to borrow locally and abroad to finance 84% of the deficit, as well as dig into its foreign reserves to cover the remaining 16%, the statement said. It projected revenues of around 8.7 billion riyals while estimated that government spending in 2017 would be 11.7 billion riyals, 2% less than in 2016. A total of 3.34 billion riyals is earmarked for defense and security.