The volume of foreign direct investment (FDI) coming into Oman increased by 8.7% in the last quarter of 2020, reaching approximately 15.86 billion Omani Riyals (about $41.2 billion), according to data from the National Centre for Statistics and Information. The official agency of the country reported that the United Kingdom ranked first in the volume of foreign direct investments, with its investments amounting to 7.86 billion Omani Riyals by the end of the last quarter of 2020, representing nearly half of the total foreign direct investment inflow to the Sultanate during that period. The oil and gas extraction sector accounted for about 10.3 billion Riyals, which is approximately 75% of the total foreign direct investment in the same period.
Developers in the renewable energy sector announced last Tuesday that a consortium including the state-owned Oman Oil Company (OQ) would develop a renewable energy project in the Gulf state, capable of producing millions of tons annually of carbon-free green hydrogen. By reaching its full capacity, the project will consist of 25 gigawatts of renewable solar energy and wind energy to produce hydrogen.
Government data previously indicated that the total revenues of Oman's budget in the first quarter of the current year declined by 30.5% compared to revenues for the same period in 2020, reaching 1.818 billion Riyals (with the Riyal equal to $2.6). The monthly bulletin issued by the Ministry of Finance attributed this decline to a 34.2% drop in net oil revenues due to the global decline in oil prices and the economic effects caused by the COVID-19 pandemic, while current revenues witnessed a 6% increase.
The ministry attributed the decrease in revenues and capital recoveries during the first quarter of the current year compared to the same period in 2020 to the allocation of part of the Oman Electricity Transmission Company, which contributed to achieving revenues of about 365.4 million Omani Riyals in March 2020. The state budget showed a reduction in public spending of 2.73% by the end of the first quarter of 2021 compared to the same period in 2020, due to several reasons, including reduced expenditures on some government unit budgets. The actual deficit was approximately 751.4 million Riyals in the first quarter of 2021.
Last month, Standard & Poor's credit rating agency affirmed Oman's rating, which remains below investment grade, while granting the Sultanate a stable outlook amid expectations of easing financial pressures this year.
