Question

1. With decreased oil prices Oman government is challenged in raising finances for public expenditures. Explain how the government could raise finances through the Central Bank of Oman and the present difficulties to such raising of funds.

Answer 1

The majority of Oman government revenue depends on the oil export . But after crash of oil price, the revenue of government has declined significantly. further after the problem of Covid-19 the demand for the government aids has risen sharply.

Now following could be the possible source of income :

• Printing of new money through the central bank of country.

It will increase the revenue of goverment and government can go for the huge public expenditure. The exceptional rise in the government expenditure will cause the rise in the inflationary pressure. The inflationary pressures could destabilize the whole economy. If expenditure is unproductive, then problem can take new dimension.