Oman 2018 state budget lifts spending
Oman 2018 state budget lifts spending
The budget projects spending of 12.5 billion rials ($32.5 billion) this year, up from 11.7 billion in the original budget for 2017, local media quoted a Finance Ministry statement as saying.
Revenue is projected at 9.5 billion rials, up from 8.7 billion in the 2017 budget. That leaves a planned deficit of 3 billion rials this year, the same as last year’s projected deficit.
The 2018 budget assumes an average oil price of $50 per barrel, up from an assumption of $45 for 2017. The Brent oil price is now above $65, so Oman’s revenue is likely to be significantly higher than expected if oil prices stay flat.
Nevertheless, the budget projects a deficit of 10 percent of gross domestic product in 2018, well above levels which economists consider sustainable in the long run.
The Finance Ministry said on Monday that it needed to continue raising expenditure to boost economic growth and living standards, while building social housing and providing other assistance to lower-income citizens.
With smaller oil and financial reserves than its wealthy neighbors, Oman has been spending heavily on industrial and infrastructure projects in an attempt to diversify its economy beyond oil exports.
That strategy has not reassured rating agencies. Last month, Fitch Ratings cut Oman by one notch to BBB-minus — just above junk territory — with a negative outlook, citing the budget deficit. Standard & Poor’s already rates Omani debt as junk.
Of the projected 3 billion rial deficit in 2018, 500 million rials is to be covered by withdrawals from financial reserves and the rest through external and domestic borrowing.
Oman’s actual state budget deficit for the first 10 months of 2017 narrowed to 3.20 billion rials from 4.81 billion rials a year earlier, the latest Finance Ministry data showed.
Finance Ministry sources told local media last week that Oman would delay the introduction of a 5 percent value-added tax until 2019, instead of imposing it in 2018 as originally planned, to give tax administrators and companies more time to prepare. However, Oman will impose a new tax on sugary drinks and tobacco products by mid-2018.
The ministry said on Monday that it would proceed with a privatization program and was working to sell some state companies in 2018.
The government announced several years ago that it would launch a major privatization scheme but there has been little progress since.
EU gives Nestle a thumbs down in Kit Kat finger row
- Nestle has been locked in a decade-long battle with US rival Mondelez, maker of Cadbury chocolate, over the four-fingered wafer biscuit, which was first sold in 1935.
- The EU’s intellectual property office allowed Nestle in 2006 to trademark what the court calls the “three-dimensional shape of the ‘Kit Kat 4 fingers’ product.”
Luxembourg: The European Union’s top court should cancel Swiss food giant Nestle’s trademark for the shape of the Kit Kat chocolate bar, the court’s top adviser said Thursday.
Nestle has been locked in a decade-long battle with US rival Mondelez, maker of Cadbury chocolate, over the four-fingered wafer biscuit, which was first sold in 1935.
The EU’s intellectual property office allowed Nestle in 2006 to trademark what the court calls the “three-dimensional shape of the ‘Kit Kat 4 fingers’ product.”
Advocate General Melchior Wathelet said the European Court of Justice (ECJ) should dismiss an appeal by Nestle against a lower court’s 2016 decision to annul the trademark.
“Nestle did not adduce sufficient evidence to show that its trademark had acquired distinctive character,” Wathelet said.
He said the intellectual property office should now “re-examine” its decision.
The Luxembourg-based ECJ often, but not always, follows the advice of the advocate general, its senior legal adviser, when making its final judgment.
The food giant specifically failed to show that the Kit Kat shape was well enough known in Belgium, Ireland, Greece, Luxembourg and Portugal, relying instead on market data from other countries, he said.
The official also said the EU court should reject an appeal by Mondelez against part of the judgment, saying it was “manifestly inadmissible.”
Nestle has already lost a legal bid in Britain — currently an EU member state but set to leave next year — to trademark the Kit Kat shape.