Overview of the General Budget for the Year 2000 [Archives:1999/47/Business & Economy]

The Ministry of Finance has, for the second consecutive year, managed to present the state general budget to the cabinet on time. This practice has helped to create a new tradition of preparing the proposed budget well before the fiscal year begins.
The year 2000 budget is estimated at 422 billion Rials. Revenues for the year 2000 are estimated at 389 billion Rials.
The project deficit for the same period is expected to reach around 33 billion Rials, equivalent to 2.9% of the Gross National Product.
The General State Budget can be divided into two major parts.
a) An estimated 367 billions classified as financial allotment for the public sectors’ productive institutions.
The figure includes recurrent costs and capital investment.
b) An estimated 36 billion Rials allocated for the public sector services institutions and include re-current costs.
The estimated government aggregate revenues for the year 2000 exceeded those for 1999 by 94.5 billion Rials. The increase is expected to be re-injected into investment projects, increased health and education spending. A small percentage will be channeled to the social security net projects.
Detailed break up of the budget is not available. However, there are a number of points which need light shed on.
1. The budget is expressed in current prices, thus the comparison purposes should be noted that there is about 10% inflation contained in the figure compared to last year’s.
2. Although the budget, which has registered an increase of 33%, seems very impressive compared to that of 1999, the most important element in the increase can be directly attributed to the revival of oil prices in international markets and export revenues. If current prices remain unchanged, the revenues in 1999 will exceed 1.2 billion Dollars compared to 600-700 million Dollars in 1998. Sales of domestically consumed refined oil together with oil export revenues constitute about 2/3 of the government’s budget.
The lifting of the remaining government subsides on wheat, flour and grain wheat has provided the government with additional financial resources.
The fact that there are more than 87 billion Rials in the hands of the government means that a favorable opportunity is at hand to generate substantial development and to complete impeded projects.
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