Based on an average oil price of $23 a barrel - compared with $21 in the previous budget - revenues are expected to rise by 7.3 per cent to RO 3,140 million ($8,051 million) and expenditure by 7.4 per cent to RO 3,680 million ($9,436 million), with the deficit financed by foreign borrowing of RO 150 million ($385 million) and RO 390 million ($1,000 million) from the State General Reserve Fund. Defence and national security, at RO 1,148 million ($2,944 million), accounts for 31 per cent of total spending while investment of RO 627 million ($1,608 million) is planned in the education and health sectors .

Announcing the 2005 budget, Macki said that gross domestic product (GDP) growth had risen to 12.5 per cent in 2004, up from 6.9 per cent in 2003. Project spending in 2004 was RO 616.8 million ($1,581.5 million), compared with the RO 214.7 million ($550.5 million) envisaged in the 2001-05 development plan. The roads, ports and power sectors were the main beneficiaries.

Macki also reiterated the government's commitment to privatisation. He said that the initial public offering (IPO) of shares in Oman Telecommunications Company (Omantel)would be launched in the first half of 2005, that privatisation of the postal sector was under consideration and that in spite of the recent breakdown of private management agreements for Seeb and Salalah airports, Muscat remained committed to privatising its airports.