130171552469129394budget 2013_united securities_jan23_2013

8/13/2019 130171552469129394Budget 2013_United Securities_Jan23_2013

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Oman Budget 2013

Mid-termReview

of8thfive year plan ;

Record spending levelsdrives Budget 2013

Research teamJoice Mathew

Santhosh Balakrishnan

Oman Economic ResearchJanuary 22, 2013


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Budget 2013: Economic growth on track spending attractive to drive such growth.

Oman Budget 2013: Overview

The Sultanate of Oman announced its Budget2013 by the Minister Responsible for Financial Affairs, HE Darwish Ismaeel al Balushi on 3rd Jan , 2013.

The budget announcement marks the third year of the 8 thfive year plan (8 thFYP) outlined in 2011-15.

The budget has unraveled most of the concerns and focus on core GDP growth despite an array of events which affected the global and regionaleconomy over the last two years.

The Sultanatesplanned spending in 2013 has given cushion to some of the sectors in the non-oil sector space, which makes itsdiversification pathmore clear to achieve the vision 2020.

According to the budget 2013, the state's public revenue for 2013 are estimated to be about RO 11.16 billion compared to RO 8.8 billion in the 2012budget, growth rate of 27%.

The expenditure is estimated to be RO 12.9 billion in 2013 compared to RO 10 billion in the 2012 Budget, an increase of 29%

The government has allocated large increase in participation and subsidy to private sector expenditure; an increase of 95% from 2012 Budget to RO1.65 billion in 2013.

The budget deficit is estimated at RO 1.7 billion in 2013 from RO 1.2 billion in 2012, which implies a deficit at 15% of revenue, the highest of the last fiveyear budgets.

The budget aims to grow its GDP growth at 7% and non oil GDP at 10.6%, while limiting inflation at 3% for 2013.

Oil price is budgeted at US$ 85/bbl in 2013 from US$75/bbl in 2012 and will result in Oil& Gas revenues accounting to 84% of total revenue, whilst thenon oil revenue forming the rest.

Oman expects to produce 930K Bpd of crude oil in its 2013 budget from 915K Bpd as outlined in its 2012 Budget.

The Budget also envisaged RO 1.1 billion spending in infrastructure projects, with c.RO 550 million for roads and other infrastructure projects. This is inaddition to the ongoing projects like Muscat and Salalah airports, Batinah Expressway, Muscat and Salalah expansion.

The budget focuses on spending in social sectors primarily in education with RO 1.3 billion spending for 2013 and also revises its spending plansoutlined in the 8thFYP.



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Omans Public Finance: Re-aligning short term strategies to achieve superior performance over long term

Source: MONE *2012 Headline figures are as per BudgetPress release

Revenue set to be slightly higher in 2013 ; Oil revenues dominates the budget

Budget 2013 has earmarked a revenue of RO 11.16 billion, higher by 27% to 2012 Budget revenue of RO8.8 billion. This difference is due to a 10% increase in budgeted oil price of USD 85/bbl in 2013 fromUSD75/bbl in 2012. We expect such increase is mainly to support the robust spending plans outlined inthe 8thFYP. We believe Oman is likely to realize an average price of USD 105-110/bbl in 2013 whichcould result in a 20-25% variance to the budgeted revenue of RO 11.16 billion. Historically Oman had anaverage variance of RO 1.2-1.5 billion in revenue during 2004-11, however the last two years hadgenerated a revenue in excess of RO 5.2 billion upon elevated oil prices. The excess has been primarilygenerated from Oil based revenues to the tune of 4.6 billion, while gas based and non oil revenue hasbeen in the range of RO 700 million. As of 2012, Omansactual Oil revenue alone accounted to 75% oftotal revenue, while gas accounted to 11% and non oil sector accounts for the rest.

Expenditure could be remarkably higher than 2012; spending to revenue, heading back to 2004-07 levels

Oman has allocated expenditure to the tune of RO 12.9 billion focusing on allocation to the most of thesectors, with spending increasing by 29% YoY, an addition of RO 2.92 billion. This could result in overallexpenditure at 116% of revenue, highest ever recorded in Oman since 2007, though the same is lowercompared to 2004-07 average of 117%. The allocation has been primarily to meet the current expenditurecatering to civil and defense sectors, which together accounts to 68% of total revenue. Oman hasincreased its allocation to the civil ministry focusing on education, health and infrastructure sectors withmore projects aiming such development. It is noticeable, that government aims to increase its exposurefocusing the social needs with its higher subsidies, accounting to 15% of revenue, the highest since2004-12. However current and capital expenditure allocation has witnessed a normal trend.

Deficit, the highest since 2007; though lowest on a % of revenue basis, not absolute levels the highest

The 2013 budget expects a deficit of RO 1.7 billion owing to robust spending plans and additionalallocation to some of the sectors, primarily infrastructure sectors. The additional allocation increasing by35% to the amount as outlined in the 8th FYP. We believe the government has been re-aligning strategiesto achieve growth rate beating expectations. We expect such deficit is more a budget notion and willresult in deficit being a surplus for 2013. The country made a surplus of RO 1 billion in 2012, much aheadof the budgeted deficit in 2012 to the tune of RO 1.2 billion. However, the surplus in 2012 will be utilized topartially finance the deficit for 2013 and may additionally raise RO 350 million through external borrowingsand RO 350 million from reserves.




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Revenue: Oil revenues could make a difference; Non-Oil sector continue to grow at a stable rateOil Revenues set to be the key component;2013 still positive

Omans2013 Budget has allocated RO 8.06 billion revenues to flow from crude oil exports, which is 32%higher than RO 6.1 billion allocated in 2012. Oil revenues accounts to lionsshare of revenue accountingto 74% on an average during 2010-12 on a realized basis, while the budget estimates 72% of revenuefrom oil sector in 2013. We believe Oman is likely to achieve such targets smoothly on the back of lowervulnerability affecting global oil demand and prices. We believe growth engines in BRIC and developedeconomies still foresee large demand in oil consumption. Though the news of shale gas productioncould have a slight impact over the long term, these worries are likely not to haunt over the short term.Oman produced 335 mn barrels of oil in 2012* achieving a growth rate of 4% YoY from 323 Mn barrelsin 2011, while it exported 278 mn barrels of crude oil in 2012 from 269 mn bbls in 2011, a growth of 3%.Oman witnessed robust growth in domestic demand which are provided on a subsidized basis toindustries and civilian transport purposes

Gas revenues set at 12% of total revenues; export opportunities limited on low scale of production

Oman expects its gas based revenues to be at 12% of revenue for its 2013 Budget which is estimated tobe RO 1.3 billion in 2013 from RO 1.1 billion allocated in 2012. However the actual data for 2012suggest, Oman achieved revenue of RO 1.5 billion in 2012*, a variance of RO 0.3 billion from Budget2012. Oman produced 37.7 Bn cm of Natural Gas in 2012*, a growth of 9% YoY from 2012 production of34.7 bn cm with c.20% of gas being imported from neighboring countries due to shortage in production tomeet the demands of the social sectors primarily power plants. We believe growth in gas basedrevenues could be limited due to limitations in production and availability of new gas blocks.

Non Oil revenues budgeted matching historical trends

Non oil revenues are estimated to be at 16% of total revenue amounting to RO 1.8 billion, lower to 18%of revenue allocated in Budget 2012 amounting to RO 1.6 billion, but still higher on absolute basis.However the increasing revenue proportion from oil based revenues resulted in non oil revenues to be at14% of total revenue. This is despite government efforts to diversify the economy and make it lessdependent on oil based revenue. The non oil revenue has shown a lower variance to actuals, hence weexpect such revenue streams on stabilized level. Revenue from Corporate income taxes and customsduties forms the majority of non oil based revenues



Source: MONE *2012 figures are on annualized basis forcomparison purposes as only Nov, 2012 data are available


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Expenditure allocation, the highest since 2007

One of the

highest

spending

Current Expenditure allocations sets record spending; increase of RO 1.7 billion

The budget allocated RO 8.1 billion in current expenditure in 2013 from RO 6.45 billion in 2012 Budget.The majority of the current expenditure are towards Civil ministries and Defense, while Oil& Gasexpenditures and other expenditures forms a small portion. Defense sector witnessed increasedallocation amounting to RO 3.6 billion in 2013 from RO 2.6 billion in 2012 Budget. However the actuals in2012 surpassed the budget. We expect current expenditure in civil ministries to increase due to theimpact of job creation in government sectors and salary hike to staffs. The government has allocated RO4 billion in 2013 from RO 3.5 billion in 2012, however actuals surpassed the budget in 2012 as well. Oiland Gas production expenditures allocation has increased by RO 100 million in 2013. Historically, suchsectors witnessed only 2-3% allocation, with the government continuing such trends in 2013.

Investment expenditure on the higher side; but government intends to spend based on 1H13 trends

The allocations to investment expenditure amounted to RO 3.15 billion in 2013 from RO 2.71 billion in2012, a growth rate of 16%. It accounted to 28% of total revenue in 2013, but lower to 2012 Budget.However increased allocations to budget is dependent on the actual revenue realized in in 1H13, whichcould result in higher allocation towards the second half of the year, like the same was witnessed in 2012as well. The investment expenditure in 2012 surpassed due to higher allocation towards projects relatedto infrastructure. The spending has been primarily on the development expenditure of civil ministries andthe second highest allocation is towards Oil& Gas production expenditures. The budget tried to maintainthe same proportion in 2012, which we believe is to replicate the same strategy adopted in 2012.

Subsidy expenditure set at higher limit to support social needs and local businesses

The Budget allocated 15% of revenue to participation and subsidy to private sector for increasing supportto the domestic businesses, thereby supporting citizens of the country. It allocated budget of RO 1.65billion in 2013 from RO 0.85 billion in 2012, an increase of 95% YoY. The same resulted in highestallocation in Omans history, for subsidy and participation expenditure. The majority of financialallocations are for the subsidy for the interests on housing and development loans and subsidy forelectricity, water, fuel and some basic foodstuffs which amounts to RO 1.3 billion. We believe the striveto improve basic social infrastructure has been the primary reason for such hike in this segment.



Source: MONE *2012 figures are on 11 month basis hencecannot be compared to budgeted as only Nov, 2012 data are

available.


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2013 Budgeted projects and spending at a glanceSe ctor Wis e Spe nding Allocation for Budge t 2013 RO M n % of total

Roads, Airports and Ports SectorWork at Khassab lima Daba road 270 25%

Dualization of Mahdah - Al Raw dah road 40 4%

Rehabilitation of Sinaw -Mohoot- Al Duqm road 80 7%

Asphalting Wadi Al Mayh road 23 2%

Complete the implementation of Sohar airport project 56 5%

Construction of Hasik port to receive the express ferries 40 4%

Adding new quays at the Port of Duqm 48 4%

Health and Education Sectors

Establishing Mohoot referral hospital 8 1%

Establishing health centers in some Wilayats 6 1%

Construction of Jalan central hospital in South Al Sharqiya 35 3%

Construction of (28) schools to meet the inevitable growth and replacement NA NM

Water and Recharging Dams Sector

Construction of water networks in the Wilayat of Samael 11 1%

Implementing the underground recharging dams project in Ibri and Sur 50 5%

Culture and Youth Centers Sector

Oman Cultural Complex 78 7%

Consultancy for the construction of spor ts stadium project in Al Musunah 9 1%

Wastewater Sector 0

Cons truc tion of w as tew ater netw ork in A l Suw aiq and A l Mudaibhi 19 2%

Financing the w astew ater projects in Muscat and Salalah 200 18%

Agricultural and Fisheries Sector

Construction of fishing port at Al Shw imiah in Al Halaniat islands 6 1%

Constructing and implementing projects in the agricultural sector 12 1%

Tourism Sector

Maritime museum project in Sur 5 0%

Financing the projects implemented by OMRAN 104 9%

Total Spending 1101 100%

Key highlights of spending focusing social sectors



Source: ONA


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7thand 8thFive Year Plans: Oman continuously surpassed budget

Source: MONE

Actual Vs Budgeted performance of 7thand 8thFYP

The 8thFYP revenue target has been in the range of RO 37.5 billion while the combined revenue for 2011-12 alone has reached RO 26.7 billion. However theactual revenue has surpassed the combined 2011-12 revenue from RO 14.5 billion (budgeted) to RO 26.3 billion in 2011-12 (Actuals).However the 7thfive yearplan revenue had a variance of 30% to actuals, with budgeted revenue at RO 25.5 billion (7 thFYP 2006-10) compared to actual revenue of RO 33.2 billion (7 thFYP Actual), while the 8thfive year plan is likely to have a much higher deviation due to impact of higher actual and budgeted oil prices.

The government aims to increase oil revenues through planned capital expenditure on oil exploration activities and target a production of 1mn B/pd by 2015.The increased EOR (Enhanced Oil Recovery) efforts drives such assumptions on possibility of higher revenues, though the government outlined an increase involumes to the tune of 930K bbl/day in 2013.

The 2011-12 spending has already surpassed and achieved 54% of the targeted spending which resulted in higher and revised allocation to the 8thfive yearplan with revised approbations of RO 16.1 billion compared with the original allocations of RO 12.1 billion, an increase of RO 4.0 billion. The approbations,which were approved during the two years (2011-2012) as an addition to the financial framework of the current Five Year Plan amounted to about RO 15 billion,

therefore the volume of the expenditure for the Plan will increase from RO 43 billion, in accordance with the original estimates of the plan, to about RO 58billion, an increase of 35%.The increase in allocations are driven by an increase in approbations for the additional projects that have been developed in all theeconomic sectors, in addition to enhancing the approbations for some projects in light of the results of tenders.

Overall the country is likely to face a surplus provided oil price is at targeted levels and deterioration in events which affected the global oil demand and prices.



7th FYP 7th FYP 7th FYP 7th FYP 8th FYP 2011-13 8th FYP 2011-12

Budget Actual Budget Actuals Budget Actual Budget Actuals

2006 2007 2008 2009 2010 Avg/Year Avg/Year Total Total 2006 2007 2008 2009 2010 Avg/Year Avg/Year Tota l Tota l

7th Five Year Plan 2006-10F 2006-10A 2006-10F 2006-10A 8th Five Year Plan 2011-15F 2011-13F 2011-15F2011-12AOil and Gas 2.91 3.57 4.23 4.19 4.85 3.95 5.19 19.75 25.95 5.88 5.80 5.74 5.93 6.32 5.93 7.48 29.65 22.90

Non Oil 0.67 0.93 1.17 1.42 1.53 1.14 1.45 5.72 7.25 1.40 1.45 1.54 1.66 1.78 1.57 1.60 7.85 3.78

Total Revenues 3.59 4.49 5.40 5.61 6.38 5.09 6.64 25.47 33.21 7.28 7.25 7.28 7.59 8.10 7.50 7.28 37.50 26.68

Current Expenditure 2.92 3 .14 3 .55 4.02 4.43 3.61 4.16 18.06 20.82 4.78 5.04 5.28 5.49 5.79 5.27 6.44 26.37 13.39

Investment Exp. 1.09 1.49 1.87 1.92 2.13 1.70 2.09 8.50 10.47 2.51 2.61 2.49 2.50 2.50 2.52 2.80 12.61 6.84

Participation & Sbdy 0.23 0 .26 0 .39 0 .49 0.62 0.39 0.50 1.97 2.49 0.84 0.85 0.79 0.64 0.61 0.75 1.11 3.73 3.70

Total Expenditure 4.24 4 .89 5 .80 6.42 7.18 5.71 6.00 28.53 30.00 8.13 8.49 8.56 8.63 8.90 8.54 10.35 42.71 23.93

Surplus/(Deficit) -0.65 -0.40 -0.40 -0.81 -0.80 -0.61 -0.60 -3.06 -3.02 -0.85 -1.24 -1.28 -1.05 -0.80 -1.04 -1.25 -5.22 2.86


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Appendix: 8thFive Year Plan: 2011-15-Recalling the project schedules outlined in 8thFYPGovernment's planned and projected spending for 8th five year plan-2011-15 (RO Mn)

% of

Sector

% of

totalDevelopment of human resources programme for abroad education for (1000) grants 100.0 41% 1.8%

Construction of (32) new schools to cancel evening classes 18.4 8% 0.3%Construction of (15) new schools for total replacement 8.8 4% 0.2%Construction of (65) new schools to face the growth in number of students 36.0 15% 0.6%Various internal scholarships (social security, grants, general medicine) 81.5 33% 1.5%Education sector: 244.7 100% 4.4%Physical support of the national training projects 27.2 50% 0.5%Projects of establ ishing, prepar ing, development and replacement of national cadres 26.9 50% 0.5%Vocational training sector: 54.1 100% 1.0%Rehab il ita tion o f Sumai l hospi ta l 10.0 4% 0.2%Al Muidhabi polyclinic 2.0 1% 0.0%Muscat re fe rra l hospi ta l 140 .0 52% 2.5%Salalah hos pital 48.0 18% 0.9%Construction of new hospitals in As Suwaiq, Mahout, Sinaw, Dhalkut, Al Muziunah 55.5 21% 1.0%Construction of new health centres at various Wilayats 8.0 3% 0.1%Construction of polyclinics in Al Kamil, Liwa, Mutrah and Nakhal 7.2 3% 0.1%

Health sector: 270.7 100% 4.8%Construction of courts' complexes in Khasab, Sur and A'Seeb 16.0 38% 0.3%Construction of a number of first instance courts at different regions 26.5 62% 0.5%J us tic e se ctor : 42 .5 10 0% 0 .8%Housing supports in different regions in accordance to the Royal Grant 200.0 45% 3.6%Housing loans projects in the different regions 48.0 11% 0.9%Construction of the replacement houses for those affected by Al Batinah coastal road 200.0 45% 3.6%Housing sector: 448.0 100% 8.0%Establishment of water pipeline and distribution for the psychiatric hospital 95.2 21% 1.7%Water supply project from Wadi Dheqeh to Muscat and Quriyat 48.0 11% 0.9%Water supply networks in vaccordance to the water sector strategy 81.8 18% 1.5%Water supply networks and accessories in various Wilayats 186.7 41% 3.3%Construction of emergency reservoirs in Muscat Governorate 40.0 9% 0.7%Water sector: 451.7 100% 8 .1%Duality of Ibri-Jibrin road 73.0 6% 1.3%Dua li ty o f N izwa-Thumra it road 250 .0 20% 4.5%Construction of the third lane of the intersection of Al Mualih-Bait Al Barkah 32.4 3% 0.6%Addressing traffic congestions in Al Burj road in Ruwi 25.5 2% 0.5%Developing the roads ' network in Muscat Governorate 24.0 2% 0.4%Wadi Hyat (Al Hamra)-Wadi Bani Auwf road (phase 2) 13.6 1% 0.2%Duality ofBid- Sur road (first and second phases) 240.0 19% 4.3%Al Batinah express way 250.0 20% 4.5%Rais ing eff ic iency of Sinaw-Mahout-Ad Duqum road 80.0 6% 1.4%Al Batinah coastal road (phase3) 200.0 16% 3.6%Internal roads paving in various Wilayats 44.8 4% 0.8%Roads sector: 1233.3 100% 22.1%

Government's planned and projected spending for 8th five year plan-2011-15 (RO Mn)

% of

Sector

% of

total

Completion of projects of Muscat International Airport and Salalah airport 468.7 28% 8.4%

depar ture bui ld ing 706.6 43% 12.6%construction of Salalah airport 294.0 18% 5.3%

Completion of the reg iona l a irports in Sohar, Adam, Ras Al Hadd and Ad Duqum 183.7 11% 3.3%

Airports sector: 1653.0 100% 29.6%

Commencing execution project of sea port and floating dock in Al Halaniyat 39.0 8% 0.7%

Completion of infrastructure projects of, docks related to Ad Duqum port 216.0 43% 3.9%

Constructions of quays (7,8,9) at Salalah port 184.1 37% 3.3%

Construction of ports and fast ferr ies in Salalah, Hasik, Al Shuaymiya and Masirah 63.0 13% 1.1%

Seaports sector 502.1 100% 9.0%

Integrated management for date palm trees pests 8.4 53% 0.2%

The national project for immunization of animal wealth 4.4 28% 0.1%

The national strategy for date palm trees 3.2 20% 0.1%

Agriculture sector: 16.0 100% 0.3%

Construction of marine fishing ports in Barka, Al Musanah, Muhout, Sadah, Al Shuiymia 25.6 58% 0.5%

Development of infrastructure to raise quality of fisheries and pisciculture 9.6 22% 0.2%

Establishing facilities in a number of f isheries landing areas 8.6 20% 0.2%

Marine fishing ports sector 43.8 100% 0.8%Construction of central markets and sheds in the various Wilayats 12.8 7% 0.2%

Compensations of Al Hafa area development project in Salalah 27.2 16% 0.5%

The national strategy of urban development 12.0 7% 0.2%

Compensations for properties affected by Al Batinah coastal road (phase2) 120.0 70% 2.1%

Town planning and municipalities' services sector: 172.0 100% 3.1%

Construction of sanitary drainage networks and plants in Barka and Al Musanah 16.8 23% 0.3%

Construction of (4) sanitary drainage networks and plants in some Wilayats 32.0 44% 0.6%

Extension of the sanitary drainage network to the central areas in Sohar 16.0 22% 0.3%

Collection, transport and treatment of sanitary drainage water in Dhofar 8.0 11% 0.1%

Sanitary drainage projects: 72.8 100% 1.3%

Protection dam above Al Khoudh in A'Seeb 24.0 63% 0.4%

Construction of recharging dams in Izki, Al Mudhaibi , Ibra, Ibri and Nizwa 14.4 38% 0.3%

Dams sector: 38.4 100% 0.7%

Digital ground televis ion broadcasting 20.0 38% 0.4%

Om an cul tural com pl ex 32.0 62% 0.6%

Information and culture sector: 52.0 100% 0.9%Improvements in Sultan Qaboos Sports Complex in Baushar 6.0 24% 0.1%

Improvements and rehabilitation of sports complexes and clubs 5.0 20% 0.1%

Construction of new sports complexes in Ibra and Al Musanah 13.6 55% 0.2%

Youth and sports sector 24.6 100% 0.4%

The national centre to ensure continuance of work by IT systems 19.2 11% 0.3%

The national initiative to activate the e-government services 13.2 8% 0.2%

The national sector for e-content and upgrading applications 8.0 5% 0.1%

Support for implementation of IT incubators projects 4.0 2% 0.1%

project of the infrastructure of optic f iber network 106.0 62% 1.9%

Royal Grant of RO. (20) million for provision of computers 20.0 12% 0.4%

Communications and information technology sector 170.4 100% 3.0%



Source:ONA


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Appendix: Comparing the 7th 8th FYP to actual performance



Source: MONE *2012 figures are on actual basis and cannot be compared to 2011 actuals as data till Nov, 2012 are available with MONE and MOG.

RO Bn 2006 2007 2008 2009 2010 Average Total RO Bn 2006 2007 2008 2009 2 010 Average Total

7th Five Year Plan Actuals

Oil and Gas Revenue 2 .91 3 .57 4.23 4.19 4 .85 3.95 19 .75 Oil and Gas Revenue 3 .84 4 .49 6.00 5.22 6.40 5.19 25 .95

Non Oil gas revenue 0 .67 0 .93 1.17 1.42 1 .53 1.14 5.72 Non Oil gas revenue 1 .14 1 .43 1.64 1.53 1.52 1.45 7 .25

Total Revenues 3.59 4.49 5.40 5.61 6.38 5.09 25.47 Total Revenues 4.98 5.92 7.64 6.75 7.92 6.64 33.20

Current Expendi tu re 2 .92 3 .14 3 .55 4 .02 4 .43 3 .61 18.06 Current Expenditu re 3 .53 3 .86 4 .42 4 .22 4 .79 4 .16 20.82

Inves tm ent Exp. 1.09 1.49 1.87 1.92 2.13 1.70 8.50 Inves tm ent Exp. 1.20 1.70 2.28 2.69 2.60 2.09 10.47

Participa tion & Sby 0 .23 0 .26 0.39 0.49 0 .62 0.39 1.97 Pa rticipation & Sby 0 .21 0 .33 0.86 0.52 0.58 0.50 2 .49

Tota l Expenditure 4 .24 4 .89 5.80 6.42 7 .18 5.71 28 .53 Total Expenditure 4 .94 5 .88 7.56 7.43 7.96 6.75 33 .77.

Surplus/(Deficit) -0.65 -0.40 -0.40 -0.81 -0.80 -0.61 -3.06 Surplus/(Deficit) 0.04 0.04 0.08 -0.68 -0.05 -0.11 -0.57

RO Bn 2011 2012 2013 2014 2015 Average Total RO Bn 2011 2012* 2013 2014 2015 Average Total

8th Five Year Plan Actuals

Oil and Gas Revenue 5.88 5.80 5.74 5.93 6.32 5.93 29.65 Oil and Gas Revenue 10.84 11.07 10.95 21.91

Non Oil gas revenue 1.40 1.45 1.54 1.66 1.78 1.57 7.85 Non Oil gas revenue 1.65 1.41 1.53 3.06

Total Revenues 7.28 7.25 7.28 7.59 8.10 7.50 37.50 Total Revenues 12.49 12.88 12.69 25.37

Current Expenditure 4.78 5.04 5.28 5.49 5.79 5.27 26.37 Current Expenditure 6.10 5.86 5.98 11.96

Investment Exp. 2.51 2.61 2.49 2.50 2.50 2.52 12.61 Investment Exp. 2.96 2.29 2.62 5.25

Participation & Sby 0.84 0.85 0.79 0.64 0.61 0.75 3.73 Participation & Sby 1.68 1.45 1.56 3.12

Total Expenditure 8.13 8.49 8.56 8.63 8.90 8.54 4 2.71 Total Expenditure 10.74 9.58 10.16 20.32.

Surplus/(Deficit) -0.85 -1.24 -1.28 -1.05 -0.80 -1.04 -5.22 Surplus/(Deficit) 1.75 3.29 2.52 5.05


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Appendix : Growth rates across selective segments (Acutal Vs Budgeted)



Source: MONE *2012 figures are on annualized basis for comparison purposes as data till Nov, 2012 are available with MONE and MOG. However our estimates are on best effort basis to match to actual


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Appendix : Composition of public finance (Actual vs Budgeted)



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Budgeted Expenditure and Allocation to key Sectors



Source: MONE and Budget Press Releases *2012 figures are on a 11-Month basis and not for comparison purposes as data till Nov, 2012 are available with MONE and MOG.


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Appendix: Capital and current Expenditure (Actual vs Budgeted) review in charts





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Appendix : Actual Public Finance data Vs Budgeted data



Source: MONE and Budget Press Releases *2012 figures are on a 11-Month basis and cannot be used for comparison purposes as data till Nov, 2012 are available with MONE and MOG.

Actuals Budgeted

Public Finance (In RO Million) 2008 2009 2010 2011 11M12 2008 2009 2010 2011 2012* 2013

Net Oil Revenues 5,093 4,491 5,470 9,665 9,663 3,610 3,522 4,050 4,956 6,100 8,055Gas Revenues 910 731 930 1173 1412 620 670 800 920 1100 1300

Oil & Gas Revenues 6,003 5,222 6,400 10,838 11,075 4,230 4,192 4,850 5,876 7,200 9,355

Non Oil Revenues* (Inc.Duties,IT,Capital rev. &Others 1,636 1,527 1,515 1,654 1,808 1,170 1,422 1,530 1,404 1,600 1,800

Revenues 7,639 6,748 7,915 12,491 12,882 5,400 5,614 6,380 7,280 8,800 11,155

Def ence & National Security 1,775 1,727 1,888 2,564 2,919 1,360 1,545 1,615 1,650 2,585 3,555

Civil Ministries 2,348 2,217 2,612 3,187 2,578 1,905 2,149 2,480 2,750 3,475 4,070

Interest Paid on Loans 51 45 37 38 37 55 54 45 75 45 60

Gas Production Expenditures 64 72 75 80 76 50 76 80 80 90 80

Oil Production Expenditures 182 158 177 235 248 180 196 212 225 250 360

Current Expenditure (A) 4,420 4,219 4,790 6,104 5,858 3,550 4,020 4,432 4,760 6,445 8,125

Development Expenditure for Civ il Minis tries 1,188 1,589 1,648 1,872 1,259 725 800 950 1,200 1,400 1,800

Capital Expenditure for Civil Ministries 47 45 48 54 25 20 21 20 20 25 30

Oil Production Expenditures 649 696 614 624 644 670 679 725 718 650 660

Gas Production Expenditures 397 361 287 409 358 450 419 433 594 635 655

Investm ent Expenditure (B) 2,281 2,691 2,597 2,960 2,285 1,865 1,919 2,128 2,532 2,710 3,145

Subsidies to Dev. & Housing loans Interests 14 14 0 0 0 0 18 20 0 0 0

International, Regional and Local organization 740 356 0 0 0 400 355 460 0 0 0

Electricity Sector 105 100 0 0 0 0 112 140 0 0 0

Participation & Subsidy To Private Sector (C) 859 519 577 1675 1446 385 485 620 838 845 1645

Total Expe nditur e (A+B+C) 7,560 7,429 7,964 10,738 9,589 6,200 6,424 7,180 8,130 10,000 12,915

Surplus/Deficit 78 -680 -48 1,867 3,293 -400 -810 -800 -850 -1,200 -1,700

Oil price (US$/Bbl) 101 57 77 103 110 55 45 50 58 75 85


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Joice Mathew Santhosh Balakrishnan Head Office

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