Oman is forecasting a 1.3 billion rials ($3.39 billion) deficit in its 2023 budget, or 3% of the gross domestic product, following an expected surplus this year after higher oil prices boosted revenues. State media reported the Gulf state expects revenues of 11.7 billion rials ($30.2 billion), up 10% over the approved budget of the year 2022, and expenditure at 13 billion rials ($33.8 billion) next year, based on an average oil price assumption of $55 per barrel. Budgeted spending next year is expected at 7% above the approved spending for 2022, state media reported, citing the finance ministry. Meanwhile, Finance Minister Sultan bin Salim al Habsi said Muscat will not apply the income tax next year. He made the remarks during the first media meeting on the state budget for 2023, which was organized by the Ministry of Finance. The ministries of economy and commerce, industry and investment promotion, as well as the Oman Investment Authority (OIA) took part in the event. The OIA said the Gulf state's sovereign wealth fund aims to spend 1.9 billion rials ($4.95 billion) on investment projects in 2023. It explained that the financing for the investment projects will come from the local and foreign private sector, financing institutions, or the agency itself or its subsidiaries. For 2022, the government is estimating a fiscal surplus of 1.15 billion rials ($2.99 billion), with revenues at 14.2 billion rials and spending at 13.09 billion rials - estimating the average oil price this year at $94/barrel. Oman swung to a budget surplus in H1 2022, easing pressure on public finances and improving its ability to meet debt obligations. The International Monetary Fund expects Oman to post fiscal and external surpluses in 2022 and over the medium term due mainly to higher oil revenue, fiscal discipline and the introduction of value added tax. In November, S&P Global upgraded Oman's credit rating to BB, from BB-, on improved fiscal performance and lower public debt. While oil prices have softened in recent weeks after highs of over $100/barrel over the course of this year, Oman's oil price assumption for its 2023 budget appears conservative.