The Persian Gulf state of Oman cut its public spending by a whopping 20% in January 2015, a new report shows.

The report, released by the Omani government’s National Center for Statistics, showed public spending was cut 20.1 percent in January as compared with the same month in 2014.

According to the report, it was a decline of 17.3 percent. The public programs that were affected by the spending cuts included the defense and national security sections of government and other public projects.

The reason for the disappointing report was mainly the recent slump in oil prices. Crude prices fell to a low of $44 a barrel earlier this year, heavily impacting the countries that export a lot of it.

Oman, along with the rest of the Persian Gulf countries, is no exception.

Oil and gas remain important to Oman’s financial system, accounting for approximately 50% of gross domestic product (GDP).

The statistics released in the report by the Omani government showed a decline in oil production expenses by 33.3 percent, basically meaning the government didn’t sell as much oil as it usually does.

Because of the slump in oil prices, Oman has a deficit totaling $6.47 billion in the current fiscal year.

The country is anticipated to issue almost 2 billion dollars in ‘sukuk’ or the Islamic equivalent of bonds to pay off some of its debt.

The slump in oil prices caught many governments off guard, putting strain on their budgeting for this year, forcing them to halt many projects.

HDS/HB