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Oman may go for bond sale

MANAMA — The Sultanate of Oman may sell bonds later this year if oil prices stay depressed, the Central Bank of Oman executive president has said.

Oman needs the oil price to be at $60-$70 a barrel to balance its budget, Hamood Sangour Al Zadjali said in Manama.

“Oman’s economic growth will slow this year because of low crude prices,” he said.

Al Zadjali was here to attend a banking conference.

“Real growth in gross domestic product could fall by as much as half to around three per cent in 2009 as the financial crisis bites,” the said.

“If oil prices are going to be depressed as they are now, or even lower, then the government might think of issuing bonds in the later part of the year,” Al Zadjali said. A bond sale would be the first by Oman in three years.

Despite the collapse in oil prices, Oman’s foreign assets were more than adequate to finance the fiscal deficit, Al Zadjali added.

Inflation in Oman will slow to about six per cent by the end of this year, Al Zadjali said. Consumer prices rose an annual 9.4 per cent in January after gaining 11.8 per cent in December, the Ministry of National Economy said last week.

Gulf nations are planning to tap global debt markets after the price of oil plunged about 64 per cent from a record high in July, slowing economic growth and investment in the region.

Abu Dhabi has hired three banks to sell dollar-denominated debt, a person familiar with the transaction said last week. Bahrain’s central bank also plans to issue bonds to help finance the country’s budget deficit, Governor Rasheed Al Maraj said this month.

Kuwait posted 20.2 billion dinars ($69.6 billion) in revenues during the first 11 months of the fiscal year ending on March 31. Actual spending was $44.3 billion, just 67.7 per cent of the projected expenditure of $65.4 billion for the whole year.