MUSCAT: Oman has announced a budget deficit for 2015 of $6.47 billion, reflecting the effect on Gulf producers of plummeting crude oil prices.

The budget includes expenditure of $36.5 billion, up 4.5 percent from 2014, and revenue of $30.03 billion, down 1.0 percent, the ONA news agency cited the finance ministry as saying.

The projected deficit will represent 21 percent of public revenue and 8.0 percent of the sultanate’s GDP.

Oman is a small producer of crude, at about one million barrels per day.

Current expenditure accounts for the lion’s share at 68 percent of public spending, far ahead of investments (23 percent), the ministry said.

Because of the falling price of oil — which brings in 79 percent of Muscat’s revenues — the government had to “take preventative measures... to preserve financial and economic stability,” the ministry’s statement said.

However, these “would have no impact” on the standard of living or on social services and employment, it added.

The statement said subsidies on consumer goods and social services in the new budget would account for 8.0 percent of public expenditure in 2015.

Stock markets in the Gulf states dived in the fourth quarter due to the slump in oil prices after posting strong gains in the first nine months of 2014.

In the fourth quarter, Oman’s stock market dropped 15.2 percent.

All the seven bourses ended the October to December period in the red amid a wave of panic sell-offs after oil lost about 50 percent of its value because of weak demand, a glut in production and a strong US dollar.

By the end of 2014, four markets — Qatar, Dubai, Abu Dhabi and Bahrain — posted annual gains while the Saudi, Kuwaiti and Omani bourses recorded dips.

Oil income makes up around 90 percent of revenues of most of the Gulf states which are forecast to lose half of their oil revenues, which stood at $729 billion in 2013.

“The fall in the fourth quarter was a direct result to the sharp drop in oil prices,” said Humoud Al-Sabah, senior analyst at Kuwait Financial Center (Markaz).

“Most of the Gulf bourses ended the first three quarters with strong gains but shed most of it due to the impact of oil prices,” Al-Sabah said.