DUBAI: Oman is forecasting a budget deficit of 640 million Omani rials ($1.66 billion) this year, around 1.5 percent of the country’s gross domestic product, state TV reported on Monday, swinging from a surplus in 2023 as lower oil production and prices weigh on public finances, according to Reuters. The 2024 budget is based on an average oil price of $60 per barrel, which is conservative by most estimates. Oman’s finance minister Sultan Salim Al-Habsi said that the estimates in the budget were based on ensuring that “financing needs are met in the event of a decline in oil prices.” The Gulf state posted a surplus of 931 million rials in its preliminary 2023 estimates, compared to a deficit of around 1.3 billion rials it had forecast initially, state news agency quoted its deputy finance minister as saying. Oil revenues are projected to reach 5.9 billion rials in 2024, the deputy finance minister said, lower than 6.9 billion rials estimated in 2023. Like its Gulf oil and gas exporting neighbors, Oman is seeking to diversify income sources and economic sectors away from hydrocarbons, but still remains largely reliant on oil revenue. Total revenues in 2024 are projected at around 11.01 billion rials, up 9.5 percent from 2023 estimates, with non-oil revenues forecast at 520 million rials. Estimated expenditures are forecast to increase 2.6 percent to around 11.65 billion rials. Among the smaller Gulf economies, Oman launched a medium term fiscal program in 2020 to reduce public debt, diversify revenue sources, and spur economic growth, which, combined with a big oil windfall in 2022, has improved public finances. “The national benefits of reducing the total public debt contribute to achieving annual savings from future public debt service amounting to 350 million rials, and reducing the total public debt until the end of 2023 by about 5.5 billion Omani rials,” the deputy finance minister was quoted as saying in the statement carried by the state news agency. Oman expects to repay 1.6 billion rials in debt in 2024.