Muscat: Oman’s government has approved the 2016 General Budget with a deficit of 3.3 billion riyals (Dh12 billion).

Darwish Al Beloushi, the Minister Responsible for Financial Affairs, said that the total revenues for 2016 are estimated to 8.6 billion riyals, while expenditure is estimated to 11.9 riyals in 2016.

Al Baloushi told Oman News Agency that the Omani government posted a budget deficit of 4.5 billion riyals in 2015.

The Ministry of Finance will announce the 2016 General Budget in details next week.

Oman is facing a big challenge amid the plunge of the oil prices, which substantially has affected the Sultanate’s revenues, which declined by more than 50 per cent in 2015.

Decreased revenue

Oman’s cabinet approved a series of spending cuts and tax hikes last Wednesday to mitigate with decreased revenues the state in receiving following the drop in oil prices. In July 2014, oil per barrel was selling at $115, but today’s prices are about $36.

The Cabinet agreed to reduce government spending as well as develop non-oil revenues by raising taxes on companies’ profits. It will also raise fees on government services and adjusting the prices of the petroleum products to be in line with the global prices.