Al-Balushi said budget spending this year would total
about 9.1 billion rials ($23.7 billion), up from an original plan of 8.1
billion rials. The country increased spending after a wave of social unrest
prompted by Arab Spring political protests across the region.
Next year's spending will be "a little more"
than 9.1 billion rials, Al-Balushi said, speaking on the sidelines of a meeting
of Gulf Arab finance ministers and central bankers.
Protests demanding jobs and an end to corruption prompted
Sultan Qaboos bin Said, a US ally who has ruled Oman for 40 years, to promise a
$2.6 billion spending package in April. He also announced plans to create
50,000 new jobs.
BOND
Speaking to Reuters at the same meeting, the head of
Oman's central bank said the non-OPEC oil producer would issue a bond to fund
development projects.
"The government is issuing a government development
bond before the end of this year in the range of 150 million rials,"
Hamood Sangour Al-Zadjali said. "It is meant for the local market and
issued by the government through the central bank."
Oman's commercial banks are set to boost profits by about
10 percent this year, driven by growth in loans and other core businesses, Al-Zadjali
said.
"The 0man banking system is resilient, strong and
comfortable. Looking at Q3 profits, we will see upward growth in the region of
about 10 percent for 2011."
Al-Zadjali added that banks' loan books were growing at
an annual rate of about 8 to 10 percent at the end of the third quarter of this
year, with deposits showing similar expansion.
He said the sultanate's first two fully fledged Islamic
banks would be operational in early 2012. The two banks will raise 40 percent
of their capital through initial public offers of shares, he said.
Bank Nizwa and Al Izz International Bank, sponsored by
local investors in Oman, have received licenses from the central bank to
operate as wholly Islamic financial institutions but have not yet opened their
doors.
Other banks in Oman are free to open Islamic windows, Al-Zadjali
added.
EURO ZONE
He said Oman's banking sector had no "direct"
exposure to the euro zone debt crisis. "Our banks have not borrowed funds
nor kept large sums with them. Our banks are conservative," he said.
Al-Balushi said the Oman Investment Fund, the country's
main sovereign wealth fund, would not alter its investment strategy to buy
European assets made cheaper by the euro zone crisis.
"They (the fund) have a strategy where they invest
in a sort of balance between the local investments and the foreign investments.
And I think we will continue with that...It is something like 60 percent in
local and 40 percent in foreign investments," Al-Balushi said.
