Oman government to help cover deficit with overseas borrowing

The government released a 2014 budget plan forecasting $35.1bn spending and $30.3bn expected revenue

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Oman’s government expects to cover a projected budget deficit in 2014 partly by borrowing overseas, Financial Affairs Minister Darwish al-Balushi said on Thursday.

The government earlier released a 2014 budget plan that envisages spending of 13.5 billion rials ($35.1bn) and revenues of $30.3bn assuming an average crude oil price of $85 a barrel. That would produce a deficit of $30.3bn.

Balushi told a news conference that the government planned to borrow $1bn this year, including $519 million overseas from commercial banks and “strategic partners” such as insurance companies.

Officials had said earlier that Oman might issue its first international bond this year since 1997, but Balushi did not mention this as a possibility.

However, he said the government expected to conduct part of its domestic borrowing in 2014 in the form of its first issue of sukuk (Islamic bonds). Oman has lagged other Gulf countries in introducing Islamic finance and is now working to develop the industry.

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