Fund will help needy in one of Gulf’s weakest economies
S&P downgraded Oman’s debt over weekend, citing deficits
Oman is allocating 100 million rials ($260 million) in next year’s budget to help needy citizens hurt by a fuel subsidies cut after oil revenue dropped.
A special committee will decide the details and mechanism of the payouts, state-run Oman News Agency said.
Oman, among the weakest economies in the Gulf Cooperation Council, was forced to slash subsidies for fuel, water, electricity and gas. It also plans to introduce a value-added tax to raise additional revenue after the slump in oil prices left it with one of the widest budget deficits in the Gulf. The gap is estimated to reach 13 percent of gross domestic product in 2017, according to the International Monetary Fund.
S&P Global Ratings downgraded Oman’s debt, already at junk, to BB from BB+ on Saturday. The rating company said large government and current-account deficits, financed predominantly through external borrowing, are eroding the sultanate’s traditional net asset positions.