Oman Increases Defence.

Oman has announced a 2.7% increase in its defence and security budget for 2015. 

Under the new budget, related expenditure will increase to OMR 3.8 billion (USD9.9 billion) despite earlier suggestions of potential cuts to related spending.

Oman Increases Defence.

According to the budget, released by the Ministry of Finance on 1 January, defence and security spending will account for around 27.0% of state spending, down marginally from its recent high of 27.7% in 2013. Spending will also fall as a percentage of GDP from 10.8% to 10.3%.

The 2.7% increase is the slowest rate of growth seen since 2011 and follows a period where defence and security spending more than doubled over a three-year period, rising from OMR1.7 billion in 2011 to OMR3.7 billion in 2014.

During that period, Oman finalised a number of major defence acquisitions, including deals for 12 Lockheed Martin F-16C/D, 12 Eurofighter Typhoon and eight BAE Systems Hawk Advanced Jet Trainer (AJT) aircraft. More recently, a USD1.3 billion contract was finalised for Raytheon's National Advanced Surface-to-Air Missile System (NASAMS) in late 2013.

Despite the less expansionary nature of the new expenditure plan, Oman's budget deficit is projected to widen to OMR2.5 billion: equivalent to around 7% of GDP and up from about 5% of GDP in 2014.

Reports in November stated that the Shura Council's Economic and Finance Committee had recommended a 5% cut to defence and security expenditure in the face of declining oil revenues.