The state ONA news agency on Saturday reported that revenues are projected at 3.14 riyals ($8.1 billion) and spending at 3.68 billion riyals ($9.5 billion).
National Economy Minister Ahmad al-Makki will unveil details of the new budget on Sunday.
The 2004 budget had projected a deficit of 500 million riyals ($1.3 billion).
Makki said last month that the country, which has been battling to halt a drop in oil production, is estimating a lower daily output of 750,000 barrels in 2005.
Estimated production for the year is 4.1% down on the figure for the first nine months of 2004 and 8.4% lower than output for all of 2003, the daily Times of Oman said last month.
Oman exported 197.4 million barrels of crude in the first nine months of 2004 - 5.5% lower than the same period of 2003.
Daily average production in 2003 was 819,500 barrels, down 8.7% from 898,000 a year before.
Oman is working to diversify its economy which is heavily dependent on oil. These efforts have included the development of gas resources and boosting industrialisation and tourism.